Reports began circulating late last week that Virgin took a loan of up to $200 million from Velocity, and Velocity has now confirmed this. The details are pretty shabby.
It was a $150 million loan handed over to Virgin in 2014, back in the Borghetti days, before Affinity Partners paid Virgin $335 million for a 35% stake in the loyalty program. FWIW, that same year, Virgin "
recorded an overall loss of $355 million". This was towards the end of Borghetti's "game change" plan which was super heavy on spending, and also the same year he took a 60% interest in Tiger, so imagine how bad the books would have looked without that $150m + $335m.
Anyway, Velocity is spinning this loan as "an investment", the loan was never repaid and so interest has been mounting up, now it's got to be around $200 million and Velocity has decided to list itself as a creditor. You can't imagine Velocity getting much money back on this, so that's $200 million worth of Velocity points gone up in smoke. So much for Virgin and Velocity claiming "you points are safe".
More sordid details on this cosy arrangement at
https://www.executivetraveller.com/n...-from-velocity