Sir Richard Branson’s beloved home on the Caribbean island has so far escaped a drastic financial overhaul of his empire – despite the billionaire’s warnings that it was in the line of fire.
Necker Island was blocked by Branson in a public address to Virgin Group employees last April. This was widely interpreted as a signal that he was ready to make personal sacrifices when the crisis hit and his employees accepted wage cuts.
He replied to “comments about my home” and his assets that he had moved to the 74 hectare Necker Island not for tax reasons, but “out of love for the beautiful British Virgin Islands”.
Paradise: Richard Branson romps about on his private island Necker. He suggested taking out a mortgage to get a loan to support his Virgin Group
He added, “As with other Virgin assets, our team will raise as much money as possible against the island to save as many jobs as possible in the group.”
However, documents from the British Virgin Islands that The Mail received on Sunday show that the billionaire Virgin Group founder has not yet taken out a loan against the island during the pandemic.
The 70-year-old tycoon has instead invested more than $ 350 million in its ruined travel and leisure business after selling shares in his space tourism business, Virgin Galactic.
This included a £ 200 million injection of cash to Virgin Atlantic as part of a £ 1.2 billion bailout whose investors closed last September.
Meanwhile, Virgin Atlantic – where employees faced early wage cuts – has shed 4,300 jobs, or 45 percent of its workforce, and fitness chain Virgin Active, which employs 2,400 people in the UK, is in talks with its lenders and landlords about a possible restructuring.
This could mean that Branson, who owns 20 percent, is investing more money alongside co-owner Brait, a South African investment firm controlled by one-time billionaire Christo Wiese.
According to sources, Branson may have to pledge more of its estimated $ 7.9 billion net worth to Virgin Atlantic as extended travel bans raise fears for the airline’s long-term survival.
Necker Island, Sir Richard Branson’s private island in the British Virgin Islands
As part of contingency plans drawn up last summer, Virgin Atlantic directors warned that the airline may need to raise more money and undertake further “significant restructuring” if passenger flights remain “limited” through August 1 of this year.
Last week, restructuring firm Alvarez & Marsal warned that hopes for air traffic recovery this summer had been “dashed” by new travel restrictions.
It added: “Without decisive action by key players in the sector, the bankruptcy of the weakest airlines will accelerate.”
An aviation insider said Virgin Atlantic was the “most vulnerable” British airline, as its revenues depend heavily on long-haul and business travel, which will be the slowest to recover after the vaccines are introduced.
The source said, “There are no long-haul light at the end of the tunnel, which is not expected to pick up until the fall, which means Virgin’s summer season is wiped out.”
Virgin Atlantic, 51 percent owned by Branson through its British Virgin Islands-based investment firm, was facing turmoil even before the pandemic, after parent company Virgin Atlantic Limited – which also owns Virgin Holidays and freight business Virgin Cargo – posted sales of Had made £ 29.5 million loss in 2019.
An aviation insider said Virgin Atlantic was the UK’s most vulnerable to failure.