Branson pumps millions of fresh funds into Virgin Active to help the gym chain ride out the pandemic
- Branson’s Virgin Group put in £2.4million to reflect its 20% stake
- South African investment firm Brait, which owns the other 80%, put in £9.6m
Sir Richard Branson has pumped millions of pounds of fresh funds into Virgin Active to help the gym chain ride out the pandemic.
Branson’s Virgin Group and South African investment firm Brait completed a joint £12million capital raise for Virgin Active in recent weeks as the Omicron variant pushed leisure firms’ recovery into reverse.
Brait, which owns just under 80 per cent of the fitness chain, contributed £9.6million and Virgin Group put in £2.4million to reflect its 20 per cent stake.
Flagging: Virgin Active’s recovery has been hit by the Omicron variant
The latest round of shareholder support follows a £70million restructuring completed in May, after Virgin Active came close to collapse during the pandemic.
Under the rescue plan, the group renegotiated debt with its lenders and landlords, and Virgin Group and Brait injected £45million.
Brait, which is controlled by South African tycoon Christo Wiese, launched a R3billion (£140million) rights issue last month, saying that Virgin Active’s ‘underperformance’ over the various lockdowns had required ‘significant’ shareholder support.
It had funded its 80 per cent share of the capital raises through extending its bank debt.
It is understood that this month’s £12million cash injection for Virgin Active has been put in place to ensure the fitness chain can shoulder a bumpy and protracted recovery from the pandemic.
On Monday Branson also chipped in to a £400million fundraise for Virgin Atlantic to steer the airline through winter travel turbulence.
In total, Branson and Virgin Group have injected more than $800million (£600million) into Virgin companies since the start of the pandemic.
Branson, 71, founded Virgin Active in 1999 and it now has 43 clubs in the UK, with a further 194 in Europe, South Africa, Asia and Australia.