Virgin Galactic, an aerospace and space tourism company, plans to raise $460 million (Dh1.69 billion) through a new share sale, and is delaying plans to take its billionaire founder Richard Branson into space due to pandemic-driven staff shortages.
The company expects Mr Branson's flight to take place in the first quarter of the next year, depending on the results of the "next phase of its test flight programme".
"Expected dates may adjust as the company processes data from each of its test flights," the company said in a statement as it released earnings on Monday. Safety remains the central focus, and the test flight programme will progress with a "step-by-step" approach, it added.
Virgin Galactic blamed the delay in flight – meant to kick-start the company's space tourism business – on the Covid-19 outbreak, which reduced the number of employees who could work at the company’s facility in Mojave, California and at its Spaceport America facility in New Mexico.
"The protocols and procedures implemented by the company in response to the pandemic have limited the number of employees who are able to work on-site ... which has slowed the company’s pace," the company said.
Virgin Galactic, plans to use proceeds from the share sale for general corporate purposes. It is offering close to 20.5 million shares and expects to grant an option to buy another 3.07 million within a 30 day period. Credit Suisse and Morgan Stanley are serving as joint lead book-running managers for the proposed offering.
Virgin Galactic's shares slumped 7.8 per cent to $22.15, bringing its market value down to $5.47bn at the close.
The company has been closely watched by investors since it went public, expecting the firm to make progress on its space tourism plans. During the second quarter, Virgin Galactic appointed Michael Colglazier as the new chief executive in preparations for the launch of its commercial service.
The company expects to advance to the next phase of its test flight programme with its first powered spaceflight from Spaceport America this fall, with two test pilots in the cockpit. Virgin Galactic then expects to conduct a second powered space flight, with a crew of two test pilots in the cockpit and four mission specialists in the cabin as passengers, according to the statement.
The company's second quarter net loss widened to $63m from $60m in first quarter of 2020, but there are "minimal customer refunds" requests, it said. Virgin Galactic currently has 600 customers who bought a place to fly on the company's sub-orbital trips.
Executives have not determined what to charge for future orbital flights as National Aeronautics and Space Administration opens the International Space Station to tourism. “We expect pricing to be competitive with other offerings in the market,” Bloomberg cited George Whitesides, Virgin’s chief space officer, as saying on a quarterly earnings call.
Virgin Galactic is facing competition from the Russian space agency, Boeing and Elon Musk’s Space Exploration, who all are planning space tourism operations. SpaceX completed its first crewed mission to the space station Sunday as its Dragon capsule ferried two Nasa astronauts back to Earth.
The company on Monday also said it will work with engine maker Rolls-Royce to develop a plane that can travel at three times the speed of sound. Virgin Galactic is also an early customer for Boom Technology planned supersonic commercial aircraft, with speeds topping twice the speed of sound.