CityAM reports that Sir Richard Branson’s $808 million deal to merge Virgin Galactic with venture capitalist Chamath Palihapitiya’s Silicon Valley investment vehicle faces a crucial vote of confidence on Monday.
Would-be shareholders will vote on whether to back the entry via investment vehicle Social Capital Hedosophia (SCH), or whether to withdraw their cash entirely.
SCH was formed in 2017 and already trades on the New York Stock Exchange. It plans to merge with Virgin Galactic, bringing the space travel venture onto the market in an unconventional move which would avoid the traditional risks of an Initial Public Offering.
The deadline for this is fast approaching, and looks set to be missed, however, which would see SCH go into liquidation.
In that case, investors get back $712m (£578m) next week. They will vote tomorrow on whether to allow this to happen or whether to postpone the deadline for a merger until December and subsequently keep their cash in the Virgin Galactic float.
Virgin Galactic and Social Capital Hedosophia announced the merger, actually a reverse acquisition, two months ago. The deal would see Palihapitiya become chairman of the company and Adam Bain join the board. Bain previously served as chief operating officer of Twitter.
Virgin Galactic is currently spending about $16 million per month ($190 million annually),. according to a presentation filed with the Securities and Exchange Commission (SEC).
Virgin Galactic previously received an investment of $390 million from an Abu Dhabi’s sovereign wealth fund. Branson broke off a MOU with Saudi Arabia for a $1 billion investment with an option for $480 million more in Virgin Galactic, Virgin Orbit and The Spaceship Company.