Virgin Galactic to offer $425m of new debt
February 1, 2022
By Chris Forrester
Sir Richard Branson’s Virgin Galactic Holdings is looking to sell $425 million (and up to $500 million if the response is good) of convertible bonds in a private offering.
Virgin Galactic will use the cash to fund working capital and general administrative purposes.
The company has next-to-zero income (last year it declared just $3.2 million of revenues) so the cash is needed to stay in business. Analysts don’t see Virgin Galactic as becoming cashflow breakeven much before 2025.
Last year the company burnt through some $242 million out of a cash pile of $732 million (as at September 2021).
Virgin Galactic is focused on space tourism but it won’t be carrying paying passengers much before the end of this year.
The news sent Virgin Galactic’s shares into a tailspin, and fell 15 per cent.