You know things aren’t really going well with the economy when even billionaires are struggling to deal with the effects of the coronavirus on their companies.
Richard Branson, the co-founder of the Virgin Group of companies, is among those caught in such a predicament. And now, the fate of one of his businesses might just lie in him making a huge sacrifice.
Giving up Shares
With Virgin Atlantic being on the verge of going under, the British businessman might just have to let go of $400 million worth of shares in Virgin Galactic, the conglomerate’s spaceflight company. The Virgin Group has actually announced that it is pondering on offering 25 million common stocks in its space travel subsidiary.
If this should push through, it would be Branson who would suffer the most as he reportedly owns an 81% stake in Virgin Galactic. Share prices in the spaceflight company have recently reached a low of $15.88 after peaking at $37 just a couple of months prior.
The announcement didn’t specify which other Virgin companies would benefit from the proceeds of the sale. It did share though that the Group would use the funds to support its travel and leisure businesses.
Space Ambitions on Hold
Branson has been active in running Virgin Galactic, which just went public in October 2019. He founded the company in 2004 and oversaw its maiden voyage years later.
Among the businessman’s current goals for the spaceflight company is to launch its first suborbital flight. Celebrities like Justin Bieber and Leonardo DiCaprio are even being considered to join Branson during the event.
These plans may have to be put on hold though for the meantime.
Branson’s new attempts at rescuing Virgin Atlantic came after the British government turned down his plea for a $622 million bailout package amidst the pandemic. The refusal happened despite the businessman’s insistence that the aid wouldn’t be ‘free money’ but a loan that his company would repay.
That promise didn’t stop people from criticizing the billionaire for begging for loans from the government even though he doesn’t pay taxes and is worth $4.1 billion himself.
For now, though, Branson has resorted though laying off thousands of the airline’s staff and the streamlining of its fleet to just 35 aircraft by 2022.