Richard Branson Offers His Private Island As Collateral For Virgin Airlines Government Loan
Like many companies right now, Richard Branson airlines Virgin Atlantic and Virgin Australia are seeking government financial support (in this case, the United Kingdom and Australia) to respond to the coronavirus pandemic. Unlike many business owners, Branson has quite an impressive possession that CNN reports it offers as collateral: its own private Necker Island In the Caribbean.
Virgin Atlantic and Virgin Australia
Branson laid bare the situation in an open letter to employees of Virgin Atlantic and Virgin Australia, citing “the serious uncertainty surrounding travel today” as a potentially fatal blow to businesses. Branson had previously injected $ 250 million into his various companies under the Virgin banner to keep them afloat, but now he is seeking government loans, and he is setting up his island in order to “raise as much money as possible against the island to save as many jobs around the group as possible. ”
The letter continues:
“The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it. Without it, there will be no competition and hundreds of thousands of additional jobs will be lost, as well as critical connectivity and enormous economic value. “
Airlines in Europe and Australia are in a somewhat different financial situation than their American counterparts, as a massive industry bailout was included in the recent US coronavirus economic recovery plan. Airlines should instead approach these governments on a case-by-case basis. Branson has been criticized for seeking financial support from the UK government for failing to pay income tax there, establishing a full-time residence on Necker Island, critics he has addressed in the letter, claiming that virgin businesses pay taxes in the UK, even if it doesn’t.
It is not yet known exactly how much money Branson will seek for his businesses with his private island online, but a recent Financial Times report said that the British government had told Virgin to resubmit its original loan request for some $ 622.2 million. US dollars – which could explain why Branson is now making this move with his own island.