Shares of Virgin Galactic fall due to plans to increase debt to $500 million

The VSS Unity spacecraft lands on the runway at Spaceport America in New Mexico following the company’s fourth space test on July 11, 2021.

Virgin Galaxy

Shares of Virgin Galactic fell in Thursday trading after the company announced plans to raise up to $500 million in debt.

“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 statement.

The space tourism company intends to raise $425 million from the sale of its 2027 convertible senior notes through a private offer, with buyers expected to be granted an additional $75 million option.

Shares of Virgin Galactic fell 16% from the previous close at $12.37.

Sir Richard Branson’s Virgin Galactic went public through a merger with a Special Acquisition Company, or SPAC, from Chamath Palihapitiya in October 2019.

At the time, Virgin Galactic said it would begin flying with customers in 2020, and Branson and three other employees of the company did make a high-profile space test flight in July 2021.

But since then, delays in spacecraft testing and development have steadily pushed back commercial use until later this year.

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