Branson sell-offs to top up war chest

SIR RICHARD BRANSON is hitting the cashpoint again. Just seven months after pocketing £217m from disposals, he has raised a further £70m by selling his interest in gourmet Raymond Blanc's restaurants and shares in the Virgin Active health clubs.

Virgin said the sales do not reflect any cashflow problems. On the contrary, it said, the great man is simply topping up his war chest. 'Richard is building up a fund to take advantage of opportunities when they arise,' said Virgin. 'We would want to be sitting on at least £250m at all times over the next two years. Virgin has access to those funds now, in cash.'

This latest fund-raising comes two years after Branson raised £600m by selling 49% in his prized business, Virgin Atlantic, to Singapore Airlines.

Branson's empire is shrouded in offshore mystery. Cash and debt flow quietly between more than 200 companies. Few, if any, know the overall picture. But recently published figures do not inspire confidence.

The cinemas and megastores business, Virgin Entertainment Europe, saw full-year losses double to £22m in the year to January 2001, even before the economic slowdown. Virgin Rail swung from annual £24m profits to £12m losses in the year to last March. And Virgin Atlantic, which generated £220m cash in the year to last April, is now losing money.

Virgin said Branson is raising cash partly for another Caribbean island. Necker, his first luxury resort, is 'booked up for the next two years', said the group.

The island, favoured by the rich and famous, including Bill Gates and Phil Collins, is a trophy. It also keeps Branson close to his money in the Virgin Islands tax haven.

But the economics are not compelling. Even at £10,000 a day, Necker will bring in no more than £3.65m sales annually. That is after 22 years of development and marketing, and £30m investment.