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11-10-2008, 11:02 AM #1
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HBOS Crisis Nearly Wiped Out Virgin atlantic
How scary is this?
The billionaire founder of the airline said HBOS refused to let his company withdraw one billion pounds of its money when it looked like it was set to go
bankrupt last month.
"Virgin Atlantic may have disappeared if HBOS had gone, it could have been that serious," Sir Richard said, adding it would have been "no fault of our own".
In an interview with Fox News he said: "HBOS looked like it was going to go bankrupt in Europe so Virgin Atlantic rings up HBOS, we have a billion pounds on deposit - not really our money, it's people who've bought tickets, people who've bought holidays - and we said, 'We want it out. We want to move it to another bank.'
"They said, 'Well, we actually, er,... Look at the small print, you can't have it out right now.'."
He went on: "And now, fortunately, Lloyds (TSB) bank made a bid for them and we got our money out."
Sir Richard made the comments as he explained why he thought governments, both in the US and the UK, should guarantee "all of their depositors' money in banks".
"Once you've got big banking rumours, it's quite likely that that bank will disappear because everybody will take their money out of it," he said.
A Virgin Atlantic spokesman said: "Richard was illustrating a point about the current banking system.
"This does not reflect Virgin Atlantic's current position with its bankers."
Last month, HBOS sought a takeover by Lloyds TSB to bring stability to the business after a run on its shares in the wake of the collapse of US investment bank Lehman Brothers, and concerns over higher funding costs in frozen inter-bank markets.
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