Richard Branson considers selling $500m stake in Virgin Galactic
‘This is the most significant crisis the world has experienced in my lifetime’
New York — Richard Branson is considering selling more than a quarter of his stake in Virgin Galactic, a move that would provide about $500m to support his broader Virgin business empire.
Branson’s Virgin Group may sell as many as 25-million shares in the space-travel firm, with the proceeds going to his leisure and travel businesses, according to a statement Monday. He owns 92.6 million shares of Virgin Galactic worth about $1.9 billion, his biggest holding in a listed business.
Virgin Galactic stock tumbled 6.3% to $18.91 at 9:32 in New York.
The 69-year-old Briton is trying to save his Virgin Atlantic Airways, which has struggled to qualify for a UK-supported loan programme aimed at helping businesses survive the worldwide coronavirus pandemic. He is seeking outside investors for the airline, while also weighing an infusion of his own funds.
Credit Suisse Group has been appointed to manage the potential stock sale.
The pandemic has rocked many of industries in which Branson has invested. His decades of media-friendly exploits, from attempts at world records to glitzy airline route launches to a bid to establish the world’s first space-tourism company, have become a millstone as states balk at coming to the aid of one of the world’s best-known entrepreneurs.
Branson said in a public letter in April that he does not have much cash on hand to put into his struggling investments, citing a record of extracting little “significant” profit from Virgin and instead constantly ploughing proceeds into new businesses. Those include a run of comparative duds, such as Virgin Cola, as well as successes such as his space company, which started trading publicly in 2019 after merging with US investment firm Social Capital Hedosophia.
The Virgin brand Branson founded as a mail-order retailer in 1970 is now linked to more than 60 businesses, including British bank Virgin Money UK.
His net worth, estimated at $5.1bn by the Bloomberg Billionaires Index, has fallen more than $2bn since mid-February.
“This is the most significant crisis the world has experienced in my lifetime,” Branson said in a March blog post. “Because many of our businesses are in industries like travel, leisure and wellness, they are in a huge battle to survive and save jobs.”