Sir Richard Branson is in advanced talks about a multibillion dollar merger to take Virgin Orbit, his satellite launch company, on to the US public markets.
Sky News can reveal that Virgin Orbit is close to finalising a deal to combine with NextGen Acquisition II, a special purpose acquisition company (SPAC) set up by George Mattson, a former Goldman Sachs banker.
Sources said this weekend that NextGen II was in exclusive talks with Sir Richard’s Low Earth Orbit satellite business, which is 80%-owned by the tycoon’s Virgin Group empire.
Mubadala, the Abu Dhabi sovereign fund, owns the remaining 20% of Virgin Orbit’s shares.
A definitive deal valuing Virgin Orbit at approximately $3bn (£2.1bn) could be announced in the coming weeks, according to insiders.
Concluding a SPAC merger would represent a further vindication of Sir Richard’s efforts to construct a multibillion dollar business empire in the burgeoning space technology sector.
In 2019, he merged Virgin Galactic, his space tourism operation, with Social Capital Hedosophia, another SPAC, in a deal which heralded the ongoing deluge of so-called ‘blank cheque’ companies.
SPACs raise funds from investors to secure an unidentified acquisition, with hundreds of the vehicles being created by prominent financiers, businesspeople and celebrity sponsors during the last two years.
Virgin Orbit has been seeking a SPAC deal for several months and has engaged in talks with multiple prospective partners, according to people close to the process.
The choice of NextGen is a logical one, since Mr Mattson is a director of Virgin Galactic, and is an experienced aviation industry insider, having also been a director of Delta Air Lines for nearly nine years.
He was previously a Goldman partner working with clients in the general industrials sector for a decade.
Virgin Orbit is part of a fast-growing sector focused on launching satellites for commercial and government clients.
The company received another burst of publicity this week when Boris Johnson was pictured in front of one of its LauncherOne rockets at Newquay’s Spaceport ahead of the G7 Summit.
In January, it launched ten small satellites into space from its Californian base, with the next launch scheduled for the end of this month.
Rocketlabs, a larger rival to Virgin Orbit, is the only other commercial small satellite operator to have achieved that milestone.
The maiden launch for Sir Richard’s company from the Cornish site could take place as soon as the end of next year.
It also plans to launch from California, Guam and Japan, and is considering further launch sites around the world.
Virgin Orbit was spun out of Virgin Galactic four years ago, and is now run by chief executive Dan Hart, a former Boeing executive.
It deploys a novel launch system using a converted Virgin Atlantic passenger plane which is now called Cosmic Girl.
Analysts at Morgan Stanley have forecast that the global space industry could be worth more than $1trn by 2040.
Rapid growth is expected after that as commercial satellite usage expands to satisfy demand from communications and other technology companies.
This week, Seraphim Capital confirmed a Sky News report that it is planning a £250m London flotation, having backed a number of space ‘unicorns’, including Arqit, a British quantum encryption company.
Arqit itself has just unveiled plans to go public via a SPAC, with Virgin Orbit among the investors in the deal, having also agreed an alliance as Arqit’s satellite launch partner.
Arqit said on Friday that it had struck a deal with six governments to launch a series of federated quantum satellites.
David Williams, the businessman who created Arqit, was also the founder of Seraphim and has established himself as one of the most influential executives in the UK space industry.
Among the remaining questions relating to Virgin Orbit’s SPAC merger will be the size and backers of its so-called PIPE – referring to the private investors in public equity which will help to fund the deal.
For Sir Richard, the crystallisation of a $2.5bn paper windfall by taking Virgin Orbit onto the New York stock markets will add another sizeable chunk to his wealth.
The businessman has sold hundreds of millions of pounds of Virgin Galactic stock over the last 15 months to invest in his consumer-facing companies, but retains a roughly-25% stake valued at over $2bn based on Friday’s closing share price.
Sir Richard’s $4.5bn space-related paper fortune has helped to weather the impact of the pandemic on his other consumer and travel businesses.
Virgin Active and Virgin Atlantic have narrowly staved off bankruptcy since the start of the coronavirus outbreak, with Sir Richard among creditors having injected substantial sums to keep them afloat.
At one point last year, he pleaded for the UK government to intervene to prop up Virgin Atlantic and warned that he might even seek to mortgage his private Caribbean island, Necker, in order to raise funds.
He is now involved in a race with Jeff Bezos to be the first ‘space billionaire’ to make it into orbit after the Amazon founder said that he and his brother would join the inaugural crewed flight of his New Shepard rocket-ship next month.
Virgin Orbit is being advised by Credit Suisse and Liontree Advisors, while Goldman is acting for NextGen on the merger talks.
A Virgin Orbit spokesman declined to comment on Saturday, while NextGen could not be reached for comment.
Record number of in-store transactions made using contactless
A record 93.4% of in-store card transactions up to £100 were made using contactless in 2023, according to data from Barclays.
The figures are based on Barclays debit card and Barclaycard credit card transactions.
Shoppers made 231 transactions on average, spending an average of £15.69 each time.
This added up to the typical shopper making £3,620 worth of contactless payments over the year.
While contactless is still more popular among younger age groups, the gap between older and younger people using the tech is narrowing, Barclays said.
Last year, the proportion of active users among 85 to 95-year-olds passed 80% for the first time.
And for the third year in a row, the over-65s were the fastest-growing group for contactless usage, Barclays said.
A survey of 2,000 people by Opinium Research for Barclays indicated just 3% of over-75s prefer using mobile payments to physical cards – compared with a quarter (25%) of 18 to 34-year-olds who said they prefer to use their phone.
More than a fifth (22%) of people aged 18 to 34 regularly leave their wallet behind when out shopping in favour of paying with their smartphone, compared with just 1% of over-75s.
Just under a fifth (18%) of people said they struggled to remember their PIN.
For the second year running, the Friday just before Christmas (22 December 2023) was the biggest day for contactless payments, as shoppers picked up last-minute gifts and enjoyed drinks as they clocked off for the holiday.
Karen Johnson, head of retail at Barclays, said: “In 2024, we expect to see a greater shift to payments using mobile wallets, as more bricks-and-mortar businesses integrate the technology into their customer experience.
“Many of our hospitality and leisure clients are finding success by giving customers the ability to order and pay from their table by scanning a QR code.”
‘Real danger’ UK will miss out on economic growth without green plan – CBI economists warn
The UK will “miss out” on economic growth unless it finally comes up with an industrial strategy to green the economy, the leading business group has warned.
As the UK economy has stagnated in recent years, the value of green industries like renewables, eco-friendly heating and energy storage is growing and will help unlock further cash for the UK, according to economists at the Confederation of British Industry (CBI).
They found that while Britain’s GDP growth was stuck at around 0.1% last year, its net zero economy grew by 9%, and attracted billions of pounds in private investment.
It argues private investment is key to unlocking growth.
The UK has committed to reaching net zero by 2050, but the report comes after Labour rowed back on its £28bn green investment pledge, and the Conservatives waged a rhetorical attack on climate policies.
Net zero means almost eliminating greenhouse gas emissions and requires changes to almost every sector, from food to housing, transport to construction.
The businesses implementing these changes – including solar panel installers and green finance advisers – added £74bn in Gross Value Added (GVA) in 2022-23, which is larger than the economy of Wales (£66 billion), according to the CBI Economics report.
But analysts at CBI Economics and thinktank ECIU, which commissioned the report, warned “the strength of future growth is in jeopardy”.
Unless the UK draws up a “Net Zero Investment Plan”, it will lose out to places with larger economies with clear plans, like the US And EU, it said.
Louise Hellem, CBI chief economist, said: “Green growth prizes could deliver a boost of up to £57bn to GDP by 2030, but global competition is heating up.
She added: “If we can’t outspend our international competitors, we need to outsmart them. And the way to do that is really through ambitious policy frameworks that can direct capital into the UK’s green industries.”
Ms Hellem said the UK economy is “well-placed to be a world leader in this space”, given its “unique blend of advanced manufacturing capacity, world leading services industry and energy technical skills”.
“That means that investors do really see opportunities in the UK market.”
‘Real danger’ UK will miss out
Getting to net zero is likely to cost about £10bn a year until 2050, according to the Office for Budget Responsibility, which is roughly equivalent to the annual defence budget, though the majority of the cost is likely to be recouped in savings.
Many technologies that scientists believe are essential to the net zero transition remain extremely expensive, such as hydrogen and carbon capture and storage.
Adam Berman, deputy director of advocacy at industry group Energy UK, said public investment can “de-risk” these technologies and “crowd in” private sector cash, that can then bring down the price.
Jess Ralston from energy thinktank ECIU, said: “The UK is in real danger of missing out on more investment from negative rhetoric and U-turns around net zero, when the EU and US are offering clear plans and are willing to invest themselves.
“Investors want certainty and that comes from long term stable policy – whoever forms the next government will have to remember that, if it wants to see the net zero economy continue to grow.”
Watch The Climate Show with Tom Heap on Saturday and Sunday at 3pm and 7.30pm on Sky News, on the Sky News website and app, and on YouTube and Twitter.
The show investigates how global warming is changing our landscape and highlights solutions to the crisis.
Post Office scandal victims secure improved interim compensation
The government has announced it will significantly increase the interim payment given to Post Office workers who have their convictions overturned, from £163,000 to £450,000.
More than 900 sub-postmasters and sub-postmistresses were prosecuted between 1999 and 2015, after faulty accounting software called Horizon, made by Fujitsu, made it seem like money was missing from their branch accounts.
Some went to prison, others were bankrupt, and lost their livelihoods and their reputations. The Horizon scandal has been called one of the biggest miscarriages of justice in British history.
So far, 101 people have had their convictions quashed, but earlier this year the government announced it would exonerate all those who were unfairly prosecuted.
‘Dangerous’ sub-1% mortgage launched for new homes
Speaking in the House of Commons on Monday, business minister Kevin Hollinrake said that that legislation will be brought forward “as soon as possible, next month.”
He told MPs: “My statement set out that the new legislation will quash all convictions which are identified as being in scope, using clear and objective criteria on the face of the Bill.
“Convictions will be quashed at the point of commencement without the need for people to apply to have their convictions overturned,” he said.
The interim payment relates to the Overturned Convictions Scheme, one of three schemes running to compensate victims of the Horizon scandal.
When they submit their claim, the former Post Office workers become eligible for an interim payment – now upped to £450,000.
They can then either accept a settlement of £600,000, or if they feel they are owed more, they can enter negotiations to have their compensation considered on an “individual basis”.
Mr Hollinrake added that those who are part of another scheme, the Group Litigation Order Scheme, would receive an offer of £75,000.
The Post Office committed to providing offers for fully submitted claims within 40 working days in 90% of cases.
However, if they don’t accept that and enter arbitration, the postmasters will get 80% of the initial offer “to make sure they don’t experience hardship while discussions are completed,” Mr Hollinrake said.
The government and the Post Office have been accused of dragging their feet on compensation, something that MPs questioned the business minister about in the chamber.
“I agree that the compensation has been given too slowly,” said Mr Hollinrake, “and that is something that we are seeking to accelerate every single day and we are doing good work, I think, with the advisory board in terms of trying to make sure that’s the case.
“I don’t think set offers are too low, I’m not saying there aren’t cases where that is not the case, certainly in terms of some of the cases in any compensation scheme will not be 100% perfect.”
Sports1 year ago
‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
Sports11 months ago
MLB Rank 2023: Ranking baseball’s top 100 players
Environment9 months ago
Japan and South Korea have a lot at stake in a free and open South China Sea
Sports2 years ago
Team Europe easily wins 4th straight Laver Cup
Environment1 year ago
Game-changing Lectric XPedition launched as affordable electric cargo bike
Technology3 years ago
Game consoles were once banned in China. Now Chinese developers want a slice of the $49 billion pie
Politics2 years ago
Have the last few wobbly weeks seen a turning point for Johnson as PM?
Environment10 months ago
Tesla advances Powerwall pilot project with German electric company