Virgin Galactic shares fall after plan to raise $500 million in debt

After the company’s fourth spaceflight test on July 11, 2021, the spacecraft VSS Unity touched down on the runway at Spaceport America, New Mexico.

Virgin Galactic

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

“The company intends to use the net proceeds from this offering to fund working capital, general and administrative affairs, and capital expenditures to accelerate the development of its spacecraft fleet,” Virgin Galactic said in a release.

The company intends to raise $425 million through a private placement of 2027 convertible senior notes, with an additional $75 million in options expected to be granted to buyers.

Virgin Galactic shares fell 16% from their previous close of $12.37.

Sir Richard Branson’s Virgin Galactic Listing through merger with special purpose acquisition company, or SPAC, from Chamath Palihapitiya October 2019. While the space tourism company said at its debut that it plans to begin flying customers in 2020, delays in the testing and development of its spacecraft have steadily delayed that plan.

After starting Branson and three other company employees Test flight in July 2021, further delays have pushed the start of Virgin Galactic’s commercial services to the end of the year.