Sir Richard Branson’s Virgin Group has given up majority control of Virgin Galactic, selling $366m worth of shares in the space travel company to fund other Virgin businesses hit hard by coronavirus.
The group sold 25m shares in Virgin Galactic, the company announced on Friday, offloading a fifth of its stake in a sale that brings its holding below 50 per cent. Virgin remains the largest shareholder with a 40 per cent stake, giving it a commanding say in running the business.
The share sale was completed by Vieco 10, an investment vehicle controlled by the group.
Virgin would use the money to “support its portfolio of global leisure, holiday and travel businesses that continue to be affected by the unprecedented impact of Covid-19”, the company said.
The group’s airlines are expected to receive the lion’s share of the proceeds. Virgin Atlantic and Virgin Australia have faced pressure on revenues as passenger aircraft around the world have been grounded due to the pandemic.
Virgin Atlantic has asked for up to £500m in loans and guarantees from the UK government. Virgin Australia was placed into administration in April after its request for a bailout worth A$1.4bn ($886m) was rebuffed by the Australian government. Sir Richard said he might mortgage Necker Island, his home in the British Virgin Islands, as a result of the pressure on the billionaire to use his personal fortune to support the struggling businesses.
Other beneficiaries from the share sale are expected to include Virgin Voyages, the group’s cruise business, and Virgin Active gyms. The company is also set to earmark a portion of the proceeds for Virgin Orbit, its satellite business, which is planning its first test launch this weekend.
The sale comes after Virgin filed to sell up to half its stake in Virgin Galactic earlier this month.
Virgin Galactic listed on the US stock market last year by combining with an acquisition vehicle led by Chamath Palihapitiya, a former Facebook executive. The deal valued the company at $2.3bn when it listed, which has increased to $3.4bn.
The company has flown crew to the edge of space but has yet to send any of the 600 customers that have signed up to fly.