On 26 October, the Virgin Group, the holding company of both firms announced that Saudi Arabia’s sovereign wealth firm – the public investment fund (PIF) – is to make an overall investment of US$1 billion in both Virgin Galactic and Virgin Orbit with an option to invest a further US$480 million. So far the agreement is a non-binding memorandum of understanding. The size of the stake that the PIF will receive in return for this investment has not been revealed, however Virgin is expected to remain a major shareholder. The other main shareholder is the Abu Dhabi-based Aabar investment fund which holds a 37.8 per cent holding in the companies after making its pre-spin off investments in Virgin Galactic.
Comment by David Todd: The SpaceShipTwo is yet to fly fully into space (set at 100 km altitude). Some of those wealthy individuals who originally signed up for suborbital spaceflights over ten years ago are now too old to fly. As it is, many wonder whether there really is a business in suborbital spaceflight. Likewise, while Virgin Orbit’s business, looks, at first sight, an attractive one with several LauncherOne launcher bookings to its name, however, longer term there are commercial risks. It plans to launch circa 200kg payloads for circa US$10 million a flight, when a new series of launch vehicles promises launch prices set at half that level. As such, it is probably very wise of Virgin Group to sell some of its shares on now.
