Virgin Galactic shares fell in trading on Thursday after the company announced plans to borrow up to $500 million.
“The Company intends to use the net proceeds from the Offering to fund working capital, general and administrative affairs and capital expenditures to accelerate the development of its spacecraft fleet,” Virgin Galactic said in a statement.
The aerospace company intends to raise $425 million from the sale of 2027 convertible debentures in a private offering, with buyers also expected to have an additional $75 million option.
Virgin Galactic shares fell as much as 16% in trading from their previous close of $12.37.
Sir Richard Branson’s Virgin Galactic went public in October 2019 through a merger with a Chamath Palihapitiya Special Purpose Acquisition Company (SPAC).
At the time, Virgin Galactic said it would begin flying customers in 2020, and Branson and three other company employees made a headline-grabbing test space flight in July 2021.
But since then, delays in spacecraft testing and development have pushed back commercial service until later this year at the earliest.