Headlines > News > The Virgin Galactic project may require extra funding

The Virgin Galactic project may require extra funding

Published by Sigurd De Keyser on Sun Jan 9, 2005 9:33 pm
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chabot imageBy Andrew Murray-Watson money.telegraph.co.uk: Branson stands to gain $1bn from US flotation

Richard Branson’s Virgin Group could make up to $1bn (£530m) in the forthcoming flotation of Virgin Mobile in the US.

Virgin Group, and its joint venture partner Sprint, the US mobile operator, will this week hold a beauty parade to appoint investment banks to handle the flotation of the business which is thought to be worth $3bn.
Virgin Group and Sprint each hold a 45 per cent stake in Virgin Mobile US with managers owning most of the remaining 10 per cent. US bankers say that though both groups will sell part of their holdings in a float they will each retain a significant stake.
However, Branson could in theory take as much as $1bn from the flotation, giving him the financial freedom to invest in other parts of his business empire.

Among the companies that might require additional funding is Virgin Galactic, Branson’s space tourism operation, that promises to send ordinary – albeit extremely wealthy – members of the public into space for the sum of $200,000 per flight.

Banks bidding to handle the float of Virgin Mobile US include JP Morgan and Morgan Stanley, which both took part in the successful £800m flotation of Virgin Mobile UK last year.
Virgin Mobile US, which was launched in July 2002, has grown rapidly by successfully targeting the youth market. It is believed to be profitable and have a turnover in excess of $1bn while customers have recently reached 3m.
Wall Street executives said that the agreed $35bn (£18.5bn) merger between Sprint and Nextel would not affect the flotation process of Virgin Mobile, which leases capacity from Sprint rather than owning its own network.

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