Sir Richard Branson has offered his luxury island home as security against a government bailout of his coronavirus-hit airline Virgin Atlantic.
The billionaire tycoon used an open letter to his 70,000 staff in 35 countries to reassure them he was “working day and night”, doing all he could to invest across his business interests despite “no money coming in and lots going out”.
He said he would use Necker Island in the Caribbean as collateral in order to secure financial help for his struggling business empire.
Sir Richard admitted his companies were exposed to many of the sectors worst affected by the COVID-19 pandemic – travel and leisure included – and also hit out at critics who have suggested he use his personal wealth to do more.
Sir Richard, who has an estimated fortune of $4.4bn (£3.5bn) according to Forbes, wrote: “Over the five decades I have been in business, this is the most challenging time we have ever faced.
“It is hard to find the words to convey what a devastating impact this pandemic continues to have on so many communities, businesses and people around the world.
“From a business perspective, the damage to many is unprecedented and the length of the disruption remains worryingly unknown.”
He said he had already committed $250m (£200m) to help businesses and protect jobs and said a big part of the personal wealth used to date had gone to Virgin Atlantic, in which his Virgin Group has a 51% stake.
“Together with the team at Virgin Atlantic, we will do everything we can to keep the airline going – but we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for.
“This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back (as easyJet will do for the £600m loan the government recently gave them).”
Sky News revealed last week that UK ministers had hired US investment bank Morgan Stanley to advise on a loan package of up to £500m.
Sir Richard warned that a Virgin Atlantic collapse would be bad for jobs and competition and said that if Virgin Australia was to fall, then it would hand an effective monopoly to rival Qantas.
US airline Delta, which holds a 49% stake in Virgin Atlantic, has already been bailed out by the Washington government, but comes with strict conditions attached.
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As Sky News business presenter Ian King explains: “The US government financial support being tapped by Delta and other carriers such as United and American has been specifically designed with the aim of preventing airline employees from losing their jobs.
“The support has been made under the Coronavirus Aid Relief and Economic Security (CARES) Act, under which, Delta may not furlough employees or cut their wages until the end of September.
“That is a primary condition for its accepting payroll assistance under the act.
“So the support is being provided to keep Delta’s employees in work and to enable it to continue running minimal services, particularly in cargo, during the crisis.
“It is not designed to bail out other businesses, like Virgin Atlantic, in which Delta may have shareholdings.”
Sir Richard also moved to address criticism of his financial status.
“There have been comments about my home,” Sir Richard said.
“Joan and I did not leave Britain for tax reasons but for our love of the beautiful British Virgin Islands and in particular Necker Island, which I bought when I was 29 years old, as an uninhabited island on the edges of the BVI (British Virgin Islands).
“Over time, we built our family home here. The rest of the island is run as a business, which employs 175 people.
“As with other Virgin assets, our team will raise as much money against the island as possible to save as many jobs as possible around the group.”