Virgin Voyages Raises Capital as CEO Retires and Fourth Ship is Delayed
Virgin Voyages, the cruise line started by Richard Branson’s Virgin Group, completed its next round of funding as it continues to rework its launch plans and moves toward completing its four cruise ship fleet. The company announced a further delay in the effort while also rearranging its itineraries and the retirement of its founding CEO Tom McAlpin. The first large new cruise brand launched in years, the company has faced a series of challenges starting with the pandemic which hit just as their first ship was due to enter service.
The company reports it has closed on an additional $550 million in a capital raise led by the Private Equity Group of Ares Management along with additional capital from existing investors including Virgin Group and Bain Capital. The new funding will enable Virgin Voyages to strengthen its financial position while supporting the brand’s expansion.
“With this new investment alongside our partners at Virgin Group and Bain Capital, we believe the company is on strong footing to capitalize on its differentiated product and value proposition in the growing cruise industry,” said Aaron Rosen, Partner and Co-Portfolio Manager of Special Opportunities in the Ares Private Equity Group.
Virgin Voyages reported a previous funding round in August 2022 raising another $550 million in an effort led by BlackRock and Goldman Sachs as the placement agent. Bain and Virgin Group also contributed additional capital for that round as well as continued support from existing lenders.
Coinciding with the closing, Virgin Voyages reports that Tom McAlpin, an experienced cruise industry executive who joined the line in January 2015, is retiring from his role as CEO. He will transition to Chairman of the Board of Directors to be replaced by Nirmal Saverimuttu, who is currently President and Chief Experience Officer. Saverimuttu is credited as being the founding leader of Virgin Voyages developing the concepts, attracting McAlpin to the group, and the first Chief Commercial Officer for the startup. The Maritime Executive profiled the launch and their efforts to disrupt the cruise industry in the January/February 2020 issue.
“It is hard to express just how proud I am of all that the Virgin Voyages crew has created and the strong endorsement we are receiving from Ares,” said McAlpin today. “While I will miss the day-to-day, I believe it is the right time to step aside as CEO.”
Virgin Voyages was challenged by the timing of its launch which came just as the pandemic took hold in early 2020. The first ship, Scarlet Lady was laid up for more than a year before they began commercial service. The company’s second cruise ship Valiant Lady entered service in 2022 and after an 11-month delay, the third cruise ship Resilient Lady entered service in May 2023. The company had announced in June 2022 that it would delay the third ship.
As part of today’s announcements, Virgin Voyages reports it has “made the tough decision to postpone Brilliant Lady’s launch.” The fourth cruise ship was due to enter service late this year and be based in San Juan, Puerto Rico. The company said it is “evaluating new possible launch dates,” citing what it said were unexpected construction, supply chain, and staffing challenges.
To account for the delay, the cruise line also announced further changes in its planned deployments. The Valiant Lady, which had been scheduled to operate from Miami this coming winter, will instead sail from San Juan to cover for the delayed ship. She will move to Miami for the summer of 2024 to replace the Scarlet Lady, which will be dry docking and then sailing in the Mediterranean before returning to Miami at the end of 2024. The Resilient Lady after starting the company’s cruises in Australia will sail in the Greek Islands between May and July 2024 and then mark the company’s return to the UK in August and September 2024. She will return to the Mediterranean after those cruises and then in October 2024 depart for Australia and New Zealand.
Virgin Voyages is highlighting that while they will be operating with three cruise ships, the company will still be introducing 19 new ports and 27 new itineraries. The current program offers a total of 63 itineraries.