Shares of Virgin Galactic fell in trading Thursday after the company announced plans to raise up to $500 million in debt.
“The company intends to use the net proceeds from the offering to fund working capital, general and administrative matters and capital expenditures to accelerate the growth of its spacecraft fleet,” Virgin Galactic said in a press release.
The company intends to raise $425 million from the sale of 2027 convertible senior notes through a private offering, with an additional $75 million of options expected to be offered to buyers.
Virgin Galactic stock fell as much as 12% from its previous close of $12.37 in premarket trading.
Sir Richard Branson’s Virgin Galactic went public in October 2019 through a merger with Chamath Palihapitiya, a special purpose acquisition company, or SPAC. While the space tourism company said during its launch that it planned to fly customers in 2020, delayed testing and development of its spacecraft has consistently pushed that schedule back.
After launching Branson and three other company employees on test spaceflight in July 2021, further delays have pushed the start of Virgin Galactic’s commercial service to later this year at the earliest.