Branson hunts Galactic cash after grounding $1bn Saudi deal

Sir ‎Richard Branson is hunting new funds for his commercial space ventures, months after halting a $1bn (£775m) Saudi-funded deal amid an international furore over the murder of Jamal Khashoggi.

Sky News ‎has learnt that the Virgin Group founder has hired LionTree Advisors, a corporate finance firm, to help raise hundreds of millions of pounds to inject into Virgin Galactic and Virgin Orbit.

Discussions with prospective investors, including sovereign wealth funds, private equity firms, high net worth individuals and strategic partners, are already under way, according to people close to the process.

LionTree's appointment is understood to have been made on the back of expressions of investor interest that followed Galactic's test flight in December to the edge of space.

Sources said this weekend that Sir Richard was seeking funding that would value Virgin Galactic and Virgin Orbit, which launches satellites for commercial customers, at a combined sum of well over $2bn (£1.55bn).

The precise amount that he is looking to raise has yet to be determined, but people close to the process suggested it would be at least $250m (£193m), representing a minority stake.

The structure of a deal could see new shareholders injecting money into either, or both, Virgin-branded space companies.

A major new investment is seen as an important means of accelerating the Virgin billionaire's efforts to launch a commercially viable space tourism venture.

Last week, he said he hoped to be in space himself this year - although sceptics point out that he has made similar predictions myriad times during the last decade.

There are, though, reasons for optimism among Galactic's existing shareholders, which comprise Virgin Group and Mubadala, the Abu Dhabi sovereign fund, which owns approximately 20% of the company.

A further test flight by VSS Unity into space is expected in the next few days, and Galactic has now made four powered flights.

Sir Richard is engaged in a race to front the‎ first successful space tourism business with Jeff Bezos, the Amazon founder who ranks as the world's richest man.

Mr Bezos's Blue Origin company is also targeting this year to take its first passengers to sub-orbital altitudes.

Separately, Elon Musk, the Tesla electric car entrepreneur, has entered the commercial space race with SpaceX, whose mission is "to enable humans to become a spacefaring civilisation".

The need for new capital for Virgin Galactic and Virgin Orbit has been triggered by the ‎global outrage over Mr Khashoggi's death.

Sir Richard signed a memorandum of understanding with Saudi Arabia's Public Investment Fund (PIF) in October 2017 to invest roughly $1bn into Virgin's space-related ventures.

The deal included an option for a further $480m (£372m) investment in the businesses, which also comprise The Spaceship Company and a point-to-point commercial spaceline which is at an earlier stage of development.

The disappearance of Mr Khashoggi, a Saudi ‎dissident, and the subsequent disclosure that he had been murdered, prompted Sir Richard to halt the PIF deal.

In a statement last autumn, the Virgin founder said he was suspending his involvement with two Saudi-funded tourism projects around the Red Sea, as well as cancelling PIF's backing of the space businesses.

The development of Virgin Galactic, which was founded in 2004, has been expensive‎ for Sir Richard, who says he has contributed as much as $1bn of his fortune to the company.

It looked to have suffered a terminal setback in 2014 after the fatal crash of a test flight, but Sir Richard has continued to persevere.

Virgin Galactic's commercial base is about to move to the New Mexico desert, where a spaceport is under construction, and the company insists its biggest engineering challenges have been solved.

It is also expected to be a critical year for Virgin Orbit, which is based in Long Beach, California, and wants to launch its first commercial satellite by the summer.

It has conducted a series of successful flight tests in recent months and is now testing its systems in the Mojave Desert.

Sir Richard believes the market for such satellite businesses will become extremely lucrative‎ - a belief reinforced by recent fundraisings by other small-satellite operators.

His search for new capital for the space ventures comes at an intriguing time for the Virgin empire.

This week, the US rail business which bears its name - in which Virgin is a minority investor said it would abandon a public listing and instead pursue interest from investors wanting to back the company privately.

Sir Richard is backing the launch of Virgin Voyages, a new Miami-based cruise operator, alongside buyout firm Bain Capital, and the expansion of his hotels division in the US.

Next year will mark the 50th anniversary of his founding of Virgin as a mail order records business.

A Virgin spokesman declined to comment on the appointment of LionTree or talks with potential investors.