Virgin Galactic is going where other borrowers have indeed gone before, with plans to raise up to $500 million in debt to continue its efforts to take tourists into space.
One might call it a black hole of a different kind.
Virgin Galactic Holdings (SPCE) – Get Virgin Galactic Holdings Inc Report plans to go where other borrowers have indeed gone before, with plans to raise up to $500 million in debt to continue its efforts to take well-heeled tourists into space and back.
Virgin Galactic said Thursday it intends to raise $425 million from the sale of 2027 convertible senior notes through a private offering, with an additional $75 million option also expected to be granted to buyers.
“The company intends to use the net proceeds from the offering to fund working capital, general and administrative matters and capital expenditures to accelerate the development of its spacecraft fleet,” Virgin Galactic said in a press release.
Sir Richard Branson’s space company went public via a merger with a special purpose acquisition company, or SPAC, from Chamath Palihapitiya in October 2019.
Watch: Jeff Bezos and Crew Return From Space (; 2:56)
While the space tourism company said during its debut that it planned to begin flying customers in 2020, delays to its spacecraft testing and development have steadily pushed that schedule back.
After launching Branson and three other company employees on a test spaceflight in July 2021, further delays have pushed Virgin Galactic’s beginning of commercial service to late this year at the earliest.
While Branson ultimately beat Amazon ( (AMZN) – Get Amazon.com, Inc. Report) Blue Origin founder Jeff Bezos into space by a little over a week, both companies have had to push back subsequent space flights.
Virgin Galactic stock fell as much as 12% in premarket trading from its previous close of $12.37. Earlier this month the shares briefly dipped below what the company was worth when it went public at a debut price of $11.75 in October 2019.
