Virgin Atlantic Airways Ltd. is closing in on a 400 million-pound (US$504 million) rescue led by Davidson Kempner Capital Management after the U.S. hedge fund offered more favorable terms than other potential backers, people familiar with the matter said.

Davidson Kempner has offered funding on terms that an alliance of Elliott Management Corp. and U.K. investment firm Greybull Capital declined to match, while Centerbridge Partners has stepped back after coming late to the process, according to the people, who asked not to be identified because the talks are private.

Billionaire Richard Branson would also inject cash into the airline he founded and controls. Virgin Atlantic could announce details of the financing package as soon as early next week if it’s able to pin down final elements, said one of the people. The Virgin Group board will be updated on the situation Friday and could meet to sign off on a deal after the weekend if sufficient progress is made, the person said.

As the deal stands now, the U.K. government, which earlier rejected a bailout request from the Crawley, England-based carrier on the grounds that its credit rating was too low, would have no role in the rescue, the person said.

A U.K. Treasury spokesman declined to comment.

Davidson Kempner and Elliott both declined to comment, while Centerbridge was unavailable for comment. Virgin Atlantic said it’s continuing to work on a comprehensive recapitalization.

“We greatly appreciate the support of our shareholders, creditors and private investors and by working together, we will ensure that Virgin Atlantic can emerge from the crisis a sustainably profitable airline, with a healthy balance sheet,” the airline said in an emailed statement.

New York-based Davidson Kempner, which has about US$30 billion of assets under management, would provide about half the money, the first person said. Branson has also committed to inject around 200 million pounds as part of a plan that wouldn’t affect equity holdings in the airline.

An agreement isn’t certain, and Elliott could seek to rekindle negotiations on its own terms if final hurdles aren’t cleared, a second person said.

Remaining issues include freeing up about 200 million pounds in credit-card payments withheld by settlement firms in case Virgin Atlantic went bust, as well as discussions with creditors such as service providers and aircraft lessors, according to the first person.

Delta Air Lines Inc., which owns 49 per cent of Virgin Atlantic, would also make a significant contribution by delaying outstanding marketing fees and other dues. Virgin Group also would waive some fees. Savings could total 400 million pounds, Bloomberg has reported.

Virgin Atlantic has been hit by restrictions on flying between the U.S. and the U.K., which have hurt the lucrative North Atlantic routes it’s focused on.

Chief Executive Officer Shai Weiss pitched his recovery strategy to a dozen potential supporters in May after the coronavirus crisis grounded flights and Britain turned down the bailout request. That led to interest from several parties, while Branson has raised more than US$400 million to help his companies by selling shares of space venture Virgin Galactic Holdings Inc.