Branson to sell Virgin Galactic stake
Virgin Group, which owns 10pc of Virgin Australia, will sell up to 12pc of its space-tourism venture to shore up its other businesses.
Richard Branson’s Virgin Group says it plans to sell as much as 12 per cent of Virgin Galactic Holdings -- the space-tourism venture that made its initial public offering in New York -- to shore up its other travel and tourism businesses.
In a regulatory filing, Virgin said it would sell as many as 25 million shares in the company, to raise funds to support its portfolio of global leisure, holiday and travel businesses. Those businesses, including a cruise line and two airlines, have been hit hard by a drop in demand amid the coronavirus pandemic.
Virgin owns 80 per cent of a subsidiary called Vieco 10, which owns roughly 69 per cent of Virgin Galactic. After the planned sale, Vieco’s stake would drop to about 42 per cent. Based on Friday’s closing price, the shares Virgin said it plans to shed would be valued at roughly $US500 million. Shares in Virgin Galactic were down 2.9 pe rcent in late US trade.
Last Month, Virgin Australia, 10 per cent-owned by Virgin, went into voluntary administration last month and a buyer is being sought for the airline.
Another, UK-based Virgin Atlantic, a trans-Atlantic shuttle, is asking for financial assistance from the UK government. Other businesses, such as a new cruise-line venture, and a US hotel group have also been hit hard.
Virgin Galactic, which plans to take passengers to the edge of space to experience several minutes of weightlessness, has been a relative bright spot. Despite a big drop with the rest of the stock market, shares in the company are up 68 per cent this year to date.
Mr Branson is in talks with about 14 private investors, including private-equity funds Cerberus Capital Management and Greybull Capital, about raising a further $US500 million to put into Virgin Atlantic, according to a person familiar with the matter. The two funds didn’t immediately reply to requests for comment.
Dow Jones Newswires
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