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$500m Worth Of Personal Shares In Virgin Galactic To Be Sold By Richard Branson


05/12/2020


$500m Worth Of Personal Shares In Virgin Galactic To Be Sold By Richard Branson
The airline business and the other industries of Virgin Group have been ravaged by the coronavirus pandemic and needs some urgent investment. In order to keep the companies afloat, founder and owner Sir Richard Branson will be selling off $500 million of his shares of Virgin Galactic and use the money n the pandemic hit businesses.  
 
After Branson’s Virgin Group told the New York Stock Exchange in a statement that it plans to sell off 25 million shares in a series of transactions, there was a 5 per cent fall in the shares of the company during pre-market trading
 
The value of the shares that are planned to be sold off make up a little over one fifth of the total stake of the Branson in the space tourism company and were worth $500 million based on the pre-announcement price of the shares which was at $20.
 
“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,” said the company.
 
The novel coronavirus pandemic has severely hit the leisure and tourism industries in particular manner all across the world. This is because of the strict lockdown measures and restrictions on movement of people imposed by governments all across the world to slow down the spread of the pandemic. A host of Virgin Group companies, including Virgin Atlantic, as well as its holidays, cruises and hotels businesses have been impacted the a virtual halt to international travel because of the pandemic. While Virgin Australia has been forced into administration because of the collapse in air travel, it has severely financially impacted Virgin Atlantic.
 
Earlier last month, Virgin Atlantic announced its plans to pull out of Gatwick airport and slash about a third of jobs in the company which reflected the extent to which the company has been financially affected by the travel bans and restrictions. Branson, who owns a majority 51 per cent stake in the airline company had snot only been seeking some urgent investments but also has been calling out for some form of government bailout so that the company could survive the current situation. 
 
There has however been c backlash for the call by Virgin for a bailout package no UK taxpayers’ money as many pointed out to Branson to make use of his vast personal wealth for financing the funding. The airline had registered three consecutive years in the black until 2017 and has not been profitable in recent years, even though it has at least some record of reporting positive earnings in the past.
 
In comparison, no profits have ever been made by Virgin Galactic and the company has been troubled with repeated delays to its plans to carry tourists into space for £202,000 per trip. Last year, Branson had that he hoped to make the first trip “in months, not years” after the company managed to secure £60 million in deposits with £100,000 from each of 60 customers.
 
(Source:www.theguardian.com)