Aabar joins Branson's space cruise venture

Aabar Investments announced yesterday it had joined British billionaire Sir Richard Branson as a partner in the world's first commercial space cruise venture that is about to launch its second inhabited aircraft into orbit.

Aabar said it paid $280 million (Dh1 billion) to become a strategic partner in Branson's Virgin Galactic and spoke of plans to fund a small satellite launch capability and the construction of the region's first spaceport in the UAE.

Veering away from its traditional energy and industrial activities, Aabar said the new investment gave it 32 per cent shareholding in Virgin Galactic, one of more than 360 companies owned by Branson's giant Virgin group.

Aabar said the landmark deal with Branson at EAA AirVenture, one of the largest aeronautics events that is held regularly in the town of OshKosh in the US state of Wisconsin where Branson was due to test-fly the new ship.

Nearly 300 people from around the world have already paid about $40m in deposits, representing $60m of ticket sales, to guarantee an early seat aboard Spaceship Two, Virgin Galactic's second since 2004.

Aabar said its CEO Mohamed Badawy Al Husseiny signed the deal with Branson in a ceremony that took place along with Virgin Galactic's new carrier space launch vehicle, White?KnightTwo (VMS Eve), which is making its public demonstration flying debut in Oshkosh.

Under the deal, Aabar will invest approximately $280m and take around a 32 per cent stake in Virgin Galactic's holding company, valuing the business at about $900m, the company said.

The transaction is subject to obtaining regulatory clearances in the US and elsewhere.

Additionally, Aabar has committed $100m (plus transaction cost) to fund a small satellite launch capability, subject to the development of a full business plan. It will also gain exclusive regional rights, subject to regulatory clearances, to host Virgin Galactic tourism and scientific research space flights.

Aabar has plans to build spaceport facilities in Abu Dhabi, the first facility of its kind in the Middle East, according to the statement.

"I am pleased to announce this partnership. Virgin Galactic is the leader in the realm of space tourism, having successfully established a potential global market for its offering in a very short span of time. Aabar's stake in Virgin Galactic will open a new avenue of opportunity for Abu Dhabi in this dynamic business," said Aabar Chairman Khadem Al Qubaisi.

"The significant partnership not only falls in line with Abu Dhabi's larger plans to inculcate technology research and science at a grassroots level but also complements its aim to be the international tourism capital of the region."

Virgin Galactic is in the final stages of developing and testing commercial sub-orbital space vehicles based on the prototype SpaceShipOne, that flew successfully to space and back three times in 2004.

"We are delighted to partner with Aabar in a strategic deal that is a first for Virgin Galactic. The initiative will leverage the solid financial backing of Aabar and the pioneering technology and strong global relationships of Virgin Galactic. This deal is indicative of the interesting and high value investments that mark the UAE's commercial portfolio," said Branson, who was rated by Forbes as the 261st richest man in the world, with an estimated wealth of $2.5bn.

Aabar said the new joint venture also proposes to undertake additional development which would enable the space system to launch small satellites at unprecedented levels of cost, reliability and flexibility. "This transaction carries multiple potential for the creation of an exceptional platform for space infrastructure such as research labs, space centre for commercial travel and much more," Badawy said.

Virgin Group has invested more than $100million in Virgin Galactic since its formation in late 2004. The development of its new vehicles is being carried out by Scaled Composites, the renowned Mojave CA based aeronautical firm, owned by Northrop Grumman and led by Burt Rutan.

Scaled Composites was responsible for designing and building SpaceShipOne which won the $10m in 2004 as the first privately funded manned space vehicle. The system is highly innovative as it utilises a carrier aircraft for launch of the spaceship at high altitude, a controllable and benign hybrid rocket motor and a unique wing feathering design for a failsafe re-entry.

It is the world's largest all carbon composite aircraft and has a unique high altitude, heavy lift capability. Branson was due to be onboard VMS Eve as a member of the crew for a demonstration flight in Oshkosh late yesterday.

The new spacecraft, SpaceShipTwo, will commence its own test flight programme before the end of 2009. Both vehicles offer a unique environment for space tourism and a wide range of science research applications as well as a platform for small satellite launch.

Patrick McCall, Virgin Group Commercial Director responsible for the transaction, said: "We are building a great partnership for the development of the world's first private sector integrated human and payload space launch system. All of us at Virgin Galactic are very much looking forward to working with Aabar as we move forward together at the cutting edge of the coming industrial revolution in space access. I would also like to take this opportunity to thank Brandt Mowry, Senior Vice-President of Corporate Development, who managed the transaction on behalf of Virgin Group."

Virgin Galactic expects the capital infusion to fully fund the company through to its commencement of commercial operations.

Credit Suisse acted as the exclusive financial advisor and placement agent to Virgin Galactic regarding the transaction.

Virgin Galactic was launched by Branson's Virgin Group in 2004 with the objective of developing commercial space vehicles which would transform the safety, cost and environmental impact associated with access to space.

Apart from offering thousands of ordinary people the chance to experience space for themselves, the system will be used for space and high-altitude science research and potentially developed to launch small satellites.

In the future the company expects to move on to the development of orbital vehicles capable of carrying people, including the possibility of offering very fast trans-continental flights around the planet.

Virgin Galactic astronauts will be prepared and trained for an experience of sensory overload, from the incredible acceleration at launch through to the "out of seat" zero gravity experienced in the blackness of space while looking through large windows at the breathtaking views of the blue planet below.

All of Virgin Galactic's first astronauts will be pioneers in a new industry which in the future will allow us to make better use of space to improve life here on earth.

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