NEWS

Abu Dhabi looks starwards with space tourism investment

Aabar Investments, an investment company backed by an Abu Dhabi sovereign wealth fund, has become the first external investor in commercial space carrier Virgin Galactic, buying a 32 per cent stake for $280 million.

The deal provides Aabar with exclusive rights to Virgin Galactic’s tourism and scientific research space flights in the Middle East, and provides impetus for the Abu Dhabi government’s plans to build spaceport facilities in Abu Dhabi.

Virgin Galactic expects the cash injection to fully fund the company until it begins commercial operations. To date, Virgin Group has invested about $100 million in the space carrier since it was formed in late 2004.

In addition to buying the equity stake, Aabar committed an additional $100 million to build a small satellite launch capability with Virgin Galactic.

The deal, which values Virgin Galactic at $900 million and is subject to regulatory clearances in the US, was announced on Tuesday July 28 by Khadem Al Qubaisi, chairman of Aabar, and Sir Richard Branson, founder of Virgin Group, at the EAA AirVenture Show in Oshkosh, Wisconsin in the United States.

Al Qubaisi said the deal substantiated Abu Dhabi’s aim to be the international tourism hub in the Middle East.

Sir Richard said the transaction was “indicative of the interesting and high-value investments that mark the United Arab Emirate’s portfolio”.

To date, 300 passengers have signed up to take the two-hour trip into space with Virgin, paying about $200,000 each, while 85,000 people have expressed interest in taking the flight.

Virgin’s spacecraft, SpaceShipTwo, takes passengers to sub-orbital altitudes of higher than 100 kilometres above sea level. During the trip, they can float from their seats in zero-gravity and view spectacular panoramas of space and the earth.

SpaceShipTwo will carry out test flights later in the year. Meanwhile, Virgin Galactic’s new ship, WhiteKnightTwo, was unveiled at the Wisconsin air show, and is scheduled to make its first public launch in Oshkosh.

Aabar was incorporated in 2005 with funds from founding investors Mubadala, an Abu Dhabi sovereign wealth fund, and government-owned manager Abu Dhabi Investment Corporation (now InvestAD) to build an oil and gas projects. It is listed on the Emirate’s stock exchange, and it largest shareholder is now the International Petroleum Investment Company, a government-owned firm.