Necker Island has been Richard Branson’s personal fiefdom for 40 years. But as his Virgin-branded businesses are battered by the coronavirus crisis, the billionaire is turning to his Caribbean hideaway for cash.
Mr Branson wrote to staff on Monday saying he plans to “raise as much money against the island as possible” as the pandemic lays waste to industries where Virgin competes, including airlines, hotels and cruises.
While it’s true that Mr Branson has been hit hard by the economic fallout from Covid-19, the move to put his own home on the line is also a result of the lukewarm response to his pleas for government bailouts of Virgin Atlantic Airways. and Virgin Australia.
Decades of media-friendly exploits, from attempts at world records to glitzy airline route launches to a bid to establish the world’s first space-tourism company, have become a millstone as states balk at coming to the aid of one of the world’s best-known entrepreneurs.
Colouring that reluctance is Necker Island itself, with the British Virgin Islands retreat portrayed as nothing more than a tax haven by some UK politicians and newspapers.
Mr Branson confronts the claim in his letter, saying he bought it age 29 because of his “love” of the island and not for tax reasons. Necker, which was originally uninhabited, isn’t just a luxury home, he contends, but also is a business that employs 175 people.
A variety of assets have been collateralised to raise funds during the pandemic, including art, diamonds and London homes, though mortgaging a private island would be particularly unusual.
“To use an island to go to a third party to raise money, I haven’t seen that,” said Farhad Vladi, who rents and sells private islands and estimates Necker was worth more than $100 million (Dh367m) before a hurricane strike in 2017. “But, of course, he’s different.”
Mr Branson, who turns 70 in July, has been a resident there since 2006, receiving guests including Princess Diana and Barack Obama. “He’s very emotionally attached to the island,” Mr Vladi said. “It’s part of his family.”
There’s little sign, though, that the announcement regarding Necker and an appeal from Mr Branson to help save thousands of jobs has changed many minds.
“[Mr] Branson has not paid tax in this country for 14 years,” British lawmaker Diane Abbott tweeted in response to his letter. “On no account should he get a taxpayer bailout, loan or otherwise.”
The UK has yet to decide on Virgin Atlantic’s weeks-old application for hundreds of millions of pounds in support.
The government has asked the airline to provide details of efforts to seek private-sector cash and hired Morgan Stanley to assess its viability and economic contribution, according to sources. Virgin has engaged investment bank Houlihan Lokey to show that it’s exploring all funding options.
Virgin Australia’s position is more acute. Administrators at Deloitte have taken control of the Brisbane-based carrier, aiming to restructure the business and find new owners within months. Virgin Group has a 10 per cent stake in the carrier.
Mr Branson has committed to injecting $250m to support his companies, with a large share going to Virgin Atlantic. Securing much more cash, though, may be challenging.
His net worth, estimated at more than $5 billion by the Bloomberg Billionaires Index, has fallen by $2bn since mid-February. Moreover, the web of investments that comprise Virgin Group makes it difficult to get access to that wealth at a time many of his businesses have seen demand collapse.
“You’ve got things tied up with paper net worth that’s not liquid and some assets have value of X, but they have debt against it,” said Claire Madden, managing partner of Connection Capital, a London-based private equity firm.
Virgin Group, based like its founder in the British Virgin Islands, doesn’t report consolidated results. Mr Branson last month also moved his $1.8bn stake in space venture Virgin Galactic Holdings – his most valuable listed business – to the archipelago as part of an internal reorganisation.
A spokeswoman for Virgin Group didn’t respond to a request for comment.
Mr Branson said in his letter that he doesn’t have much cash on hand, citing a record of extracting little “significant” profit from Virgin and instead constantly plowing proceeds into new businesses. That’s meant funding a run of comparative duds such as Virgin Cola, as well as successes such as the space arm.
“Oftentimes first-generation wealth holders are consumed with setting-up and growing their businesses, thus they keep reinvesting their wealth back into them,” said Rebecca Gooch, director of research at Campden Wealth. “While this can be the best thing for the businesses, it can also lead to personal liquidity challenges when facing an unprecedented crisis like the coronavirus.”
Mr Branson is hardly the only billionaire needing to shore up businesses as the virus spreads.
Wealthy investors have had to meet margin calls on their pledged shares as markets plunged. India’s Gautam Adani and his family put up an additional $1.4bn of stock as collateral on existing debt this month, and wealth managers like UBS and Credit Suisse have asked clients to post additional guarantees.
Some of the Englishman’s bets have sharpened the cash crunch. In particular, a rebound in Virgin Atlantic’s fortunes last year prompted him to scrap the sale of a 30 per cent stake to Air France-KLM in favour of retaining control.
Mr Branson, who had said the deal was vital to allow Virgin Atlantic to reach its full potential, should perhaps have heeded his own warnings about the precarious nature of the airline business.
“If you want to be a millionaire, start with a billion dollars and launch a new airline,” he once said, only half jokingly.
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
UAE currency: the story behind the money in your pockets
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
RESULT
Uruguay 3 Russia 0
Uruguay: Suárez (10'), Cheryshev (23' og), Cavani (90')
Russia: Smolnikov (Red card: 36')
Man of the match: Diego Godin (Uruguay)
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
WORLD CUP SEMI-FINALS
England v New Zealand
(Saturday, 12pm UAE)
Wales v South Africa
(Sunday, 12pm, UAE)
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Read more from Aya Iskandarani
OTHER IPL BOWLING RECORDS
Best bowling figures: 6-14 – Sohail Tanvir (for Rajasthan Royals against Chennai Super Kings in 2008)
Best average: 16.36 – Andrew Tye
Best economy rate: 6.53 – Sunil Narine
Best strike-rate: 12.83 – Andrew Tye
Best strike-rate in an innings: 1.50 – Suresh Raina (for Chennai Super Kings against Rajasthan Royals in 2011)
Most runs conceded in an innings: 70 – Basil Thampi (for Sunrisers Hyderabad against Royal Challengers Bangalore in 2018)
Most hat-tricks: 3 – Amit Mishra
Most dot-balls: 1,128 – Harbhajan Singh
Most maiden overs bowled: 14 – Praveen Kumar
Most four-wicket hauls: 6 – Sunil Narine
The biog
Date of birth: 27 May, 1995
Place of birth: Dubai, UAE
Status: Single
School: Al Ittihad private school in Al Mamzar
University: University of Sharjah
Degree: Renewable and Sustainable Energy
Hobby: I enjoy travelling a lot, not just for fun, but I like to cross things off my bucket list and the map and do something there like a 'green project'.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Global state-owned investor ranking by size
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1.
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United States
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2.
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China
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3.
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UAE
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4.
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Japan
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5
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Norway
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6.
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Canada
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Singapore
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8.
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Australia
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9.
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Saudi Arabia
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South Korea
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POWERWASH%20SIMULATOR
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Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
How it works
Each player begins with one of the great empires of history, from Julius Caesar's Rome to Ramses of Egypt, spread over Europe and the Middle East.
Round by round, the player expands their empire. The more land they have, the more money they can take from their coffers for each go.
As unruled land and soldiers are acquired, players must feed them. When a player comes up against land held by another army, they can choose to battle for supremacy.
A dice-based battle system is used and players can get the edge on their enemy with by deploying a renowned hero on the battlefield.
Players that lose battles and land will find their coffers dwindle and troops go hungry. The end goal? Global domination of course.
The Good Liar
Starring: Helen Mirren, Ian McKellen
Directed by: Bill Condon
Three out of five stars
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
COMPANY%20PROFILE
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
COMPANY%20PROFILE
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The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Two products to make at home
Toilet cleaner
1 cup baking soda
1 cup castile soap
10-20 drops of lemon essential oil (or another oil of your choice)
Method:
1. Mix the baking soda and castile soap until you get a nice consistency.
2. Add the essential oil to the mix.
Air Freshener
100ml water
5 drops of the essential oil of your choice (note: lavender is a nice one for this)
Method:
1. Add water and oil to spray bottle to store.
2. Shake well before use.
Teachers' pay - what you need to know
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues
57%20Seconds
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RESULTS
Catchweight 82kg
Piotr Kuberski (POL) beat Ahmed Saeb (IRQ) by decision.
Women’s bantamweight
Corinne Laframboise (CAN) beat Cornelia Holm (SWE) by unanimous decision.
Welterweight
Omar Hussein (PAL) beat Vitalii Stoian (UKR) by unanimous decision.
Welterweight
Josh Togo (LEB) beat Ali Dyusenov (UZB) by unanimous decision.
Flyweight
Isaac Pimentel (BRA) beat Delfin Nawen (PHI) TKO round-3.
Catchweight 80kg
Seb Eubank (GBR) beat Emad Hanbali (SYR) KO round 1.
Lightweight
Mohammad Yahya (UAE) beat Ramadan Noaman (EGY) TKO round 2.
Lightweight
Alan Omer (GER) beat Reydon Romero (PHI) submission 1.
Welterweight
Juho Valamaa (FIN) beat Ahmed Labban (LEB) by unanimous decision.
Featherweight
Elias Boudegzdame (ALG) beat Austin Arnett (USA) by unanimous decision.
Super heavyweight
Maciej Sosnowski (POL) beat Ibrahim El Sawi (EGY) by submission round 1.
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
