OXFORD, United Kingdom—The proceeds from a string of disposals will be used by the owner of Virgin, Richard Branson, to develop his burgeoning mobile virtual network operator (MVNO) cell-phone business. The company’s latest deal involves Virgin Active, a health club venture, being sold for US$154 million to Bridgepoint Capital, a private equity firm.
This latest sale comes one week after Branson raised more than US$58 million by selling major investments in hotels and restaurants in Europe. The company has denied that these divestments are part of a cash-raising effort to support the remainder of Virgin’s sprawling empire. “We are a US$7 billion venture capital business, and these sales are part of our normal development strategy,” said a Virgin executive.
The company was unforthcoming about where these funds might be used to expand its Virgin Mobile business, which remains unprofitable. However, as the major cell-phone operators around the world focus more on prompting global brands, it would seem that Virgin Mobile might struggle to compete in the more lucrative markets where existing brands already have a strong presence.
