Thursday, July 30, 2009

Virgin Galactic takes Abu Dhabi oil money

It is certainly a case of the rich getting richer and a sign of the only way these space tourism companies will ever get off the ground but either way Mr Branson pockets another profit for himself.

Today Virgin Galactic today sold a 32% stake of the company, which is valued at about $900 million, to an Abu Dhabi-based investor raising $280 million to help fund future test-flight program.

Bailed out

Virgin Galactic stated that it expects the capital infusion to fully fund the company to its commencement of commercial operations. The Virgin Group has spent over $100 million on its space flight venture since forming it in 2004.

Aabar Group

With the investment Abu Dhabi's Aabar Group gets exclusive rights to host Virgin space tourist and scientific flights. The group also said it wants to pay an extra $100 million to fund a program to launch small satellites of its own into orbit, and will build spaceport facilities in Abu Dhabi. US regulators and others must approve the deal.

Space Ship One

Virgin Galactic claims it is in the final stages of developing and testing commercial sub-orbital space vehicles based on the prototype SpaceShipOne. The current launch aircraft, WhiteKnightTwo, made a splash this week by flying at the Experimental Aircraft Association's annual AirVenture air show in Oshkosh, Wisconsin.

Space Ship Two

WhiteKnightTwo will carry the pressurized spacecraft SpaceShipTwo to about 50,000ft, where SpaceShipTwo will release and fire a rocket taking it to about 360,000ft at speeds over Mach 3, Virgin says. SpaceShipTwo then glides back to a runway landing. More than 300 people have paid almost $40 million in ticket deposits to get on the flights, according to London-based Virgin.

Test Flights

SpaceShipTwo will begin test flights before the end of 2009. Both vehicles offer a unique environment for space tourism and a wide range of science research applications as well as a platform for small satellite launch, Virgin stated.

First Private Sector Launch

"We are building a great partnership for the development of the world's first private sector integrated human and payload space launch system," said Patrick McCall, Virgin Group Commercial Director in a statement.

Forbes Comment

According to, this may not be the last big financial splash the space company makes: "The aim over a bit of time is to try to IPO the business," said a spokesman for Virgin Group. He said the procedure would follow a similar template seen at

  • Virgin Blue, the Australian airline floated in 2003;
  • Virgin Mobile UK, floated in 2004;
  • Virgin Mobile USA, floated in 2007.
Sold out
The entire Virgin Group even went public in 1986, but was bought back by Virgin's billionaire owner, Richard Branson. Such a move by Virgin Galactic would be a couple years away at least, observers said but Mr Branson must be wringing his hands with glee at this deal. Looks like he is off the hook again.

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