'Eccentric Billionaire' Branson Sells Spaceship to Save Airline

Including Virgin Galactic Shares Worth 200 Million Pounds

Announcement of a ?1.2 Billion Rescue Package

[Asia Economy Reporter Kwon Jae-hee] 'Eccentric' Richard Branson, chairman of Virgin Group, is selling shares of the valuable affiliate Virgin Galactic to rescue the airline owned by his company. Initially expecting a bailout from the UK government, he decided to raise funds himself to save the airline as public opinion worsened and government support became unlikely.

Foreign media have praised Branson for presenting a valuable gift to himself on his birthday.

According to Bloomberg on the 14th (local time), Virgin Group announced a rescue package totaling ?1.2 billion (approximately 1.8 trillion KRW). This includes ?170 million raised from the US hedge fund Davidson Kempner Capital Management and ?200 million raised by selling shares of Virgin Galactic, the space venture company owned by Branson. The funds raised will be used to rescue airline affiliates such as Virgin Atlantic and Virgin Australia, which are facing crises due to the COVID-19 pandemic.

Virgin Group’s airlines have struggled since the beginning of the COVID-19 outbreak this year. Virgin Atlantic conducted restructuring by cutting more than 3,000 employees, equivalent to one-third of its workforce, while Virgin Australia, the second-largest airline in Australia, entered voluntary administration at the end of last month. This is considered the first case of a major airline entering bankruptcy proceedings due to COVID-19.

Branson is about to celebrate his 70th birthday on the 18th. Bloomberg described the bailout plan as "a valuable gift from the eccentric Branson to himself."

The decisive factor for preparing the self-rescue plan was the collapse of the expected UK government support. Branson strongly hoped for government aid, even offering to put up his Caribbean island as collateral if the government provided a bailout.

However, opposition grew against the billionaire Branson receiving support funded by UK taxpayers, making it virtually impossible to receive the bailout. Additionally, the fact that he lives abroad after leaving the UK fueled controversy over whether he was eligible for government aid.

Virgin Galactic, which went public on the New York Stock Exchange last October, is a valuable company with a market capitalization of $3.9 billion (approximately 4.7 trillion KRW). Branson has invested over $1 billion (about 1.2 trillion KRW) of his personal funds and nurtured it carefully. Alongside Tesla’s SpaceX and Amazon’s Blue Origin, it has grown into one of the three major private space exploration companies. For this reason, it is considered the only affiliate capable of easily raising cash.

Branson had already announced in May that he would pursue the sale of Virgin Galactic shares. Virgin Group announced it would sell up to 25 million shares of Virgin Galactic, valued at about $500 million (approximately 610 billion KRW).

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