Sir Richard Branson has moved to sell a big stake in the Virgin Galactic space tourism venture – worth more than half a billion dollars – to create a coronavirus fighting fund for his Virgin Group.
It was confirmed that up to 25 million shares in US-listed Virgin Galactic were being readied for sale – with a combined current market value of around $504m (£405m).
It represents 22% of his holding in Virgin Galactic, meaning the entire stake is currently worth more than $2bn.
“Virgin intends to use any proceeds to support its portfolio of global leisure, holiday and travel businesses that have been affected by the unprecedented impact of COVID-19,” the statement said.
Virgin Atlantic Airways is at the top of the priority list for help as the tycoon has warned the airline will collapse without financial support.
Frantic rounds of rescue talks have been held with the UK government as Virgin Atlantic seeks a £500m loan and a government guarantee on further sums owed to it by credit card companies.
It has already announced plans to cut more than 3,000 jobs under an immediate survival plan – first revealed by Sky News – that also includes slashing its fleet.
Virgin Group has also already seen Virgin Australia fall into a process called voluntary administration, putting thousands of jobs at risk.
The sale of shares in Virgin Galactic is a statement of commitment from Sir Richard to his wider business empire – sectors badly hit by pandemic disruption.
It comes amid calls from some quarters that he should use more of his personal wealth to prop up Virgin Atlantic, which is also part-owned by Delta.
Virgin Galactic, which floated last year through a merger deal, has been a big success story ever since with shares up almost 70% in the year to date ahead of Monday’s opening, when the stock fell by up to 6%.
It is hoping commercial flights can begin following final tests on its reusable spacecraft due this year.
They can carry six passengers on a 90-minute trip to the edge of space with tickets already selling for up to $250,000.