Branson to sell Galactic stake to prop up Virgin Group
Sir Richard Branson is selling a stake in Virgin Galactic to raise $500m to prop up his other businesses including Virgin Atlantic. The billionaire has been criticised for seeking financial help from the taxpayer for the airline.
Sir Richard will now sell a share of his space tourism business.
Virgin Group said it will use the proceeds to support its “leisure, holiday and travel businesses” hit by “the unprecedented impact” of Covid-19.
Virgin Atlantic said last week it would cut more than 3,000 jobs and end its operation at Gatwick.
Virgin’s Australian airline entered administration last month. The airline industry has been struggling as the coronavirus pandemic brought global travel almost to a halt. In April, Sir Richard – who owns 51% of Virgin Atlantic – offered to put his luxury Necker Island resort up as collateral to secure a UK government loan, believed to be around £500m.
Those talks with the government are continuing. But Virgin Atlantic, which is a private company, has been focusing on discussions with investors.
It was reported at the weekend that potential investors include private equity firms Greybull Capital, which came under scrutiny after the collapse of British Steel, and Apollo Global Management.
In March, Chancellor Rishi Sunak wrote to airlines and airports urging them to find other forms of funding, and that the government would only step in as “a last resort” during the coronavirus crisis. The airline has also lined up restructuring specialists Alvarez and Marsal to draw up contingency plans in case of insolvency.