Virgin Orbit to Take Equity Stake in Struggling Sky & Space Global

Cosmic Girl performs a pitch up maneuver during a flight test on April 12, 2020. (Credit: Virgin Orbit)

by Douglas Messier
Managing Editor

Richard Branson’s Virgin Orbit launch company will acquire an equity stake in Sky and Space Global (SAS) and sign new strategic launch services and mutual reseller agreements with the struggling communications satellite company.

SAS announced on Oct. 28 that Virgin Orbit would take no less than a 14.7% stake in the company by purchasing shares at a price of A$.020 (US$0.14) each.

The amount of the investment was not announced. However, SAS disclosed plans to sell 11 million shares of stock at A$.020 (US$0.14) or A$2.2 million (US$1.55 million) in a separate filing with the Australian Securities Exchange (ASX).

Virgin Orbit would also receive options to purchase 7 million shares that it could exercise at A$0.40 (US$0.28) each. Those options, which would expire after three years, would cost A$2.8 million (US$1.97 million).

SAS entered voluntary administration in April after failing to raise funds to built a constellation of 200 CubeSat communications satellites. Voluntary administration is a form of bankruptcy in Australia, where the UK-based company’s stock is listed.

“We are delighted to have Virgin Orbit as a partner and shareholder as we progress the recapitalisation of the business and short-term commercialisation of our nanosatellite communications technology,” said SAS Chairman Xavier Kris.

As part of the deal, Virgin Orbit would cancel ASA’s A$55 million (US$38.7 million) launch services contract under which communications satellites would be orbited using the LauncherOne rocket. The contract would be replaced by two other agreements.

“SAS and Virgin Orbit will sign a three-year, A$1 million per annum launch services and consulting agreement, commencing on 1 July 2021,” SAS said. “In addition, the two parties will enter into a Mutual Reseller Agreement, whereby Virgin Orbit will promote SAS’ services to its current customer base, and SAS will refer and resell Virgin Orbit’s launch services.”

Virgin Orbit would also appoint an observer to the SAS Board of Directors under the deal.