UK carrier Virgin Atlantic has secured a £1.2bn refinancing package over the next 18 months to stabilise its position after the coronavirus (Covid-19) pandemic.

The carrier launched a court-backed process as part of a private-only solvent recapitalisation of the airline.

As part of the recapitalisation, shareholders will be providing £600m, including £200m from Virgin Group. Creditors will also supply more than £450m of deferrals.

Additionally, global institutional investment management firm Davidson Kempner Capital Management is investing £170m.

Virgin Atlantic CEO Shai Weiss said: “The solvent recapitalisation of Virgin Atlantic will ensure that we can continue to provide vital connectivity and competition to consumers and businesses in Britain and beyond.

“We greatly appreciate the support of our shareholders, creditors and new private investors and together, we will ensure that Virgin Atlantic can emerge a sustainably profitable airline, with a healthy balance sheet.”

The recapitalisation is part of the company’s five-year Restructuring Plan.

The plan secured approval from the majority of stakeholders and dependent on the consent from all relevant creditors.

The company expects to implement the restructuring plan and recapitalisation later this year.

Weiss added: “Once our plan is approved, we will continue to focus on providing our customers with the service they have come to expect.

“Despite the incredible efforts of our teams, through cancelled flights and delayed refunds, we have not lived up to the high standards we set ourselves, but we will do everything in our power to earn back their trust.”

In May, Virgin Atlantic decided to cut 3,150 jobs across all functions as part of the carrier’s plan to reduce costs, preserve cash, and return to profitability following the pandemic.

The carrier will resume operation from 20 July.