Richard Branson, founder of the multibillion-dollar conglomerate Virgin Group, has pledged to mortgage his home and luxury holiday resort in the British Virgin Islands to help his business empire navigate the coronavirus crisis.
The pledge on his Necker Island home was made in a letter to staff, posted on SirRichard's personal blog on Monday. It came a day before Virgin Australia — 10 per cent owned by the billionaire's company — collapsed into administration after failing to secure a government bailout.
The letter tackles head on many of the controversies that have dogged the Virgin founder in recent years, such as the tax status of his family and businesses, and which now may threaten government support for Virgin Atlantic, 51 per cent owned by the billionaire.
The carrier, like many airlines around the world, is facing a potentially fatal cash outflow as governments halt international air travel in the fight to contain the pandemic.
In the UK, Sir Richard said Virgin Atlantic could only "keep going" with government support. The group has asked for a package of £500 million ($1.02 billion) in commercial loans and state guarantees to help pay fixed costs and bolster cash.
"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)," he wrote, in the letter first cited by Sky News.
"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 won't be any competition left and hundreds of thousands more jobs will be lost."
In Australia, Sir Richard said the disappearance of Virgin Australia would leave Qantas with "a monopoly of the Australian skies".
Virgin's existing shareholders — Singapore Airlines, Sir Richard's Virgin Group, Etihad, HNA and China's Nanshan Group — have all balked at putting more cash into the struggling airline, which is lossmaking and has net debt of almost A$5b ($5.2b).
Sir Richard's request for aid has drawn sharp criticism in the UK, adding to a long-running controversy over the entrepreneur's record. One government adviser told the FT recently that it was unlikely that ministers would want to be seen bailing out a billionaire when so many people had lost their jobs.
Last week the UK government told Virgin to resubmit its bid for government help. People close to the situation told the FT that the airline had not done enough to show it had explored other options to bolster cash before asking for state aid.
Virgin Australia collapsed into administration yesterday. Photo / 123RF
Sir Richard said his private island in the British Virgin Islands, bought when he was 29 years old and since transformed into a luxury resort, would be available as security for any loans.
"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," he said.
The Virgin founder hit back at critics with a fierce defence of his career, in both business and charitable endeavours. People close to the entrepreneur said he wanted to correct "mistruths" about his record.'
"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," said the London born magnate.
"Our companies have created hundreds of thousands of jobs and paid hundreds of millions in tax around the world (and will continue to do so). Our companies based in the UK pay tax in the UK."
On his wealth, Sir Richard said his net worth was "calculated on the value of Virgin businesses around the world before this crisis, not sitting as cash in a bank account ready to withdraw".
Sir Richard also spoke about the controversial 2017 decision by Virgin Care to sue the National Health Service after it lost a contract to provide children's services in Surrey.
"Virgin Care was never intending to profit from it and 100 per cent of the money awarded went straight back into the NHS," he said. "If Virgin Care ever does make a profit, we have committed to reinvest 100 per cent of that back into the NHS."
He also insisted that Virgin Money Giving, a non-profit fundraising platform accused of taking fees when processing charitable donations, "never makes a profit and never will".
The 2 per cent fee covered overheads which the group's online bank, Virgin Money, was now paying "for all charities".
Written by: Peggy Hollinger, Nikou Asgari and Jamie Smyth
