Aabar to take 32 pc stake in Virgin Galactic

Aabar Investments plans to take a 32 per cent stake worth $280 million in Virgin Group's space travel unit Virgin Galactic, in Abu Dhabi's latest effort to lure tourists and diversify away from oil.

In a joint statement with Virgin posted on the Abu Dhabi bourse website, Aabar said the deal was still subject to US and other regulatory approval, but that it had committed an additional $100 million to fund satellite launch capability.

“The... 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,'' Aabar Chairman Khadem Al Qubaisi said in a statement.

Virgin Galactic, part of Richard Branson's Virgin Group, has collected $40 million in deposits from would-be space tourists including physicist Stephen Hawkins and ex-racing driver Niki Lauda and hopes to start commercial flights in two years.

Virgin Galactic has bookings from the 300 people willing to pay $200,000 each for a space flight and envisages long-haul trips being made in spaceships rather than planes in 20 years time if its efforts to commercialise space travel succeed.

The Virgin Galactic deal gives Aabar regional rights to host tourism and scientific research space flights, the company said, adding it planned to build a spaceport in Abu Dhabi.

A new spacecraft, SpaceShipTwo, is due to begin its own test flight programme before the end of 2009, the statement said.

Aabar is an investment company controlled by the International Petroleum Investment Company (IPIC), which is wholly owned by the government of Abu Dhabi.

IPIC is one of the investment vehicles used by the Abu Dhabi government to invest oil income. Abu Dhabi pumps most of the oil produced by the UAE, the world's third-largest oil exporter.

Fuelled by a six-year oil boom, Abu Dhabi has invested billions of dollars in developing its infrastructure and propelling itself on the global stage.

It is already building a cultural island district, housing offshoots of the Louvre and Guggenheim museums and is set to host a Formula 1 race later this year.