Richard Branson sells third stake in Virgin Galactic to prop up other firms

Shares in space tourism firm worth $300m will support Virgin Atlantic and other businesses hit by Covid-19

Richard Branson has sold a further $300m (£220m) stake in Virgin Galactic to raise more funds to prop up his airline, Virgin Atlantic, and other businesses hit hard by the pandemic.

It is the third time Sir Richard, 71, has sold a large tranche of shares in in his space tourism company since it joined the New York stock exchange in 2019. He sold $505m worth in May 2020 and $150m in April this year, taking his total stake sales to almost $1bn. He still holds about 46m shares worth $1.2bn.

The parent company, Virgin Group, said in statement that it “intends to use the net proceeds from this sale to support its portfolio of global leisure, holiday and travel businesses that continue to be affected by the impact of the Covid-19 pandemic, in addition to supporting the development and growth of new and existing businesses”.

Virgin Investments sold 10.4m Virgin Galactic shares this week at prices of between $25 and $34, according to filings with the US Securities and Exchange Commission (SEC). The shares fell 3% in early trading on the news, before recovering to 1% down.

The sale comes about a month after Branson became the first billionaire to successfully launch a fully crewed private flight into space. Virgin Galactic’s rocket plane launched on 11 July, just days before Amazon’s Jeff Bezos blasted off in his Blue Origin New Shepard spacecraft. Tesla’s Elon Musk is also preparing for space flight with his company SpaceX.

Virgin Atlantic, in which Virgin Group owns a 51% stake – the US airline Delta owns the other 49% – was plunged into crisis by the near-cessation of transatlantic flights at the height of the pandemic. It has required several emergency cash injections.

Branson had pleaded for UK government support for the airline, but his requests prompted a substantial backlash. Many critics pointed out that he has paid no personal income tax in the UK since moving to the tax-free British Virgin Islands 14 years ago.

Speculation is growing that Branson is considering a stock market flotation for Virgin Atlantic.

Contributor

Rupert Neate Wealth correspondent

The GuardianTramp

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