Mubadala and its affiliate companies report Virgin Galactic stake

Mubadala holds 7.08% stake, or 14.9 million shares, in the space tourism company for 'investment purposes'

Mubadala Investment Company,  Abu Dhabi’s strategic investment arm, and its affiliate companies on Friday reported holdings in space tourism company Virgin Galactic.

The state-owned company disclosed a 7.08 per cent stake, or 14.88 million shares, in the aerospace company, according to a regulatory filing to the US Securities and Exchange Commission. Mubadala-owned International Petroleum Investment Company (Ipic), along with Ipic's units Aabar Space and Aabar Investments, each own 7.08 per cent in Virgin Galactic.

The companies acquired the shares for "investment purposes," according to the filing.

Mubadala, which invests on behalf of the Abu Dhabi government entities, has assets worth Dh853 billion under management. The company, which invests across sectors including technology, life sciences and renewables among others, is increasingly looking to invest in advanced technology sectors.

The disclosure comes after Virgin Galactic offered 23.6 million shares priced at $19.50 (Dh71.6) each last week, according to a statement on August 5.

The company expects gross proceeds of $460.2m through the new share sale and the offering is expected to close on August 10.

Virgin Galactic intends to use the proceeds from the share offering mainly for general corporate purposes, including working capital, general and administrative matters and capital expenditures.

It also granted an option to buy an additional 3.54 million shares within a 30 day period. Credit Suisse and Morgan Stanley are serving as joint lead book-running managers for the offering.

The company's shares fell 5.64 per cent to $18.25 at the close of trading in New York on Friday, bringing its market capitalisation down to $3.84bn.

Virgin Galactic is delaying plans to fly its British billionaire founder Richard Branson into space until early 2021, instead of this year, it said last week.

Mr Branson's trip depends on two upcoming test flights. The first powered space flight from Virgin's Spaceport America facility in southern New Mexico is scheduled this Autumn with two test pilots in the cockpit. The second will add four mission specialists in the cabin.

Mr Branson will fly into space in the first quarter of 2021, "assuming both flights demonstrate the expected results", Virgin Galactic said in an August 3 regulatory filing.

The company blamed the delay on the Covid-19 pandemic which led to limitations on the number of employees working on-site at its facilities in Mojave, California, and at Spaceport America.

"As always, safety remains the central focus, and the test flight programme will progress with a step-by-step, diligent approach," the company said at the time. "Expected dates may adjust as the company processes data from each of its test flights."

Virgin Galactic has seen "minimal customer refunds" and has 600 customers who bought a place to fly on the company's sub-orbital trips. It received more than 700 deposit payments as of July 30 from people interested in buying a ticket. Additionally, it has received deposits from 12 customers for orbital space flights.

Virgin Galactic recorded a widening net loss of $63m in the second quarter, compared with a $60m net loss in first quarter of 2020.

The aerospace company is facing competition from the Russian space agency, Boeing and Elon Musk’s Space Exploration, which all are planning space tourism operations. SpaceX completed its first crewed mission to the space station last week as its Dragon capsule ferried two Nasa astronauts back to Earth.

Virgin Galactic 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's planned supersonic commercial aircraft, with speeds topping twice the speed of sound.

In June, Virgin Galactic signed an agreement with Nasa to develop a programme to promote private missions to the International Space Station.