'Shaken by COVID-19' British Branson to Sell Stake in Space Exploration Company to Secure Airline Funding

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Richard Branson, chairman of the Virgin Group, has decided to sell shares of the private space exploration company Virgin Galactic to secure funds for its airline subsidiaries struggling due to the novel coronavirus disease (COVID-19).

According to BBC and other outlets on the 11th (local time), Virgin Group announced in a statement that it plans to sell up to 25 million shares of Virgin Galactic it holds. The sale is expected to raise about $500 million (approximately 610 billion KRW). CNBC explained that the price offered by Virgin Group was about 22% lower than Virgin Galactic’s closing price of $20.18 per share on the 8th.

Virgin Group plans to use these funds to support its airline subsidiaries, Virgin Atlantic and Virgin Australia, which are facing difficulties due to COVID-19. Virgin Galactic is considered one of the three major private space exploration companies in the U.S., alongside SpaceX, led by Tesla CEO Elon Musk, and Blue Origin, led by Amazon CEO Jeff Bezos.

Virgin Group’s airline subsidiaries have been hit hard by the impact of COVID-19. Earlier, Virgin Atlantic decided to lay off more than 3,000 employees, accounting for one-third of its workforce. Virgin Australia recently entered a restructuring process, and other Virgin Group businesses such as hotels and cruises have also suffered significant shocks due to COVID-19.

Accordingly, Virgin Atlantic is currently holding briefings for private investors to raise 750 million euros in investment funds. Private equity funds (PEFs), sovereign wealth funds, and hedge funds have shown interest in investing in Virgin Atlantic, and a conclusion is expected as early as next week.

Additionally, Chairman Branson requested support from the UK government, but there are prospects that it will be difficult to materialize due to negative public opinion. This is because Branson resides in the Virgin Islands, a tax haven, to avoid paying taxes, and there is controversy over the appropriateness of helping him with taxpayer money.

This content was produced with the assistance of AI translation services.