Virgin Australia says it has no reason to believe confidentiality in relation to its $425 million shareholder loan facility was breached before the deal was announced on Monday, even though its share price had plunged by 12.5 per cent on Friday. 
In response to a query from the Australian Securities Exchange, Virgin said the 12-month debt facility provided by Air New Zealand, Etihad Airways, Singapore Airlines and Virgin Group was not finalised until 11:50pm on Sunday evening and was announced to the market as soon as possible.
"Until this time, the terms of the loan facility, including required third party consents, were substantially incomplete and outside the entity's control," Virgin said.
The Australian Financial Review's Due Diligence column, which went to print before the loan deal was finalised on Sunday, on Monday raised the prospect that the airline was seeking a shareholder-backed recapitalisation of around $500 million.
Virgin shares had fallen by 12.5 per cent, or 5&cent;,  to 35&cent; on Friday on volumes 10 times the usual average. The ASX query reveals the stock exchange held discussions with Virgin about the share price fall on the day, during which Virgin pointed to recent market commentary about its weak balance sheet.
The airline said other than that, it was not aware of any reasons behind the share price plunge and remained in compliance with continuous disclosure obligations. Virgin shares rebounded to close 9 per cent, or 3&cent; higher at 38&cent; on Monday, which an analyst attributed to market fears of an imminent equity raising having abated.
At the time of its half-year results, Virgin chief executive John Borghetti said the airline would "continue to focus on optimising its balance sheet through the second half of the 2016 financial year".
Analysts raised concerns about the carrier's dwindling cash levels, with unrestricted cash down to $543.7 million on   December 31 from $718.9 million as of   June 30.
Virgin took out a $US125 million ($164 million) short-term loan facility in the first half, when it reported net operating cashflows of $10.2 million and a net cash outflow of $133 million. 
The Australian Financial Review's Street Talk column last month said investment bankers were pitching options to the company, including a further sell-down of its Velocity frequent flyer program or tapping its strategic shareholders for debt or equity.
UBS is assisting Virgin with the review of its balance sheet and capital structure announced on Monday. 
Bell Potter analyst John O'Shea said Virgin's funding options were not extensive and were likely to revolve around the willingness of its key shareholders to provide additional debt or equity.
He said the tone of Virgin's update on Monday suggested operating conditions remained challenging despite the favourable oil prices, with the slowdown in the resources sector appearing to have contributed to weak passenger growth in the first half.