LOS ANGELES, Oct. 29 (Xinhua) -- The Virgin Group has announced an agreement with the Saudi government for an investment of approximately 1 billion U.S. dollars into space travel company Virgin Galactic and a number of related businesses.
"I'm pleased to announce the intention of the Public Investment Fund (PIF) of the Kingdom of Saudi Arabia (KSA), pending approval by the U.S. government, to invest approximately $1 billion into our U.S. based space companies, Virgin Galactic, The Spaceship Company and Virgin Orbit," British entrepreneur Richard Branson, founder of the Virgin Group, said in a statement this week.
The non-binding Memorandum of Understanding (MoU) between the Virgin Group and the PIF covers a partnership whereby the investment will take a "significant stake" in Virgin Galactic, Virgin Orbit and The Spaceship Company.
The money will go toward Virgin's space tourism program and help accelerate the development of the company's new launch vehicle to send small satellites into orbit.
The deal also contains an option for 480 million dollars of additional investment in the future, according to a news release.
The agreement is pending regulatory approvals, the companies said. This will likely include the Committee on Foreign Investment in the United States, the Treasury Department office that reviews investments by foreign entities in American companies for any national security or other issues, according to media reports.
"We are now just months away from Virgin Galactic going into space with people on board and Virgin Orbit going into orbit and placing satellites around the Earth," said Branson.
"This investment will enable us to develop the next generation of human spaceflight, more economic satellite launches and accelerate our programme for trans-continental point-to-point space travel."
Virgin Group said the deal could also lead to "the possibility to develop a space-centric entertainment industry" in Saudi Arabia.
The deal was announced during the Future Investment Initiative taking place in Riyadh this week, which has drawn together a large number of prominent business leaders and has seen a series of ambitious announcements, including a 500 billion dollars economic zone called Neom in the largely-uninhabited northwest corner in Saudi Arabia.
The PIF investment is the second one by a fund in the region in Virgin Galactic. Aabar, a fund based in Abu Dhabi, made an initial 280 million dollars investment in 2009 for 31.8 percent of Virgin Galactic's holding company.
As of 2016, Aabar reported investing 380 million dollars in Virgin Galactic and owning 37.8 percent of the company.
Branson has been working on his space venture for many years. It has suffered a number of setbacks, including a host of missed launch dates, as well a disastrous test flight in October 2014 which killed one pilot and injured another.
However, Branson now says the company is almost ready to launch its services. In recent public comments, Branson said he expected the vehicle to make its first suborbital spaceflight by the end of the year and start carrying people, including Branson himself, in as little as six months.
Virgin Galactic is approaching the beginning of powered flight tests of its second SpaceShipTwo suborbital vehicle, which is built by The Spaceship Company, a former joint venture with Scaled Composites now owned by Virgin.
Virgin Orbit, spun out of Virgin Galactic in March, is developing the LauncherOne small satellite air-launch system.
