A general view of Cosmic Girl, a converted Boeing 747 aircraft carrying the LauncherOne missile under its left wing, during final preparations at Cornwall Airport Newquay January 9, 2023 in Newquay, Britain.
Matthew Horwood | Getty Images
Virgin Orbit is in final talks to raise funds from Texas-based investor Matthew Brown, two people familiar with the deal told CNBC, totaling a $200 million cash injection.
Virgin Orbit and Brown began talks about deals last week, one of the people said, around the same time the company announced it would suspend operations and furlough most employees to seek a financial lifeline. Brown would get a majority stake in the rocket maker, according to people who asked to remain anonymous to conduct private negotiations.
The parties aim to finalize the deal as early as Thursday, the people said.
At the same time, a person familiar with the matter said the company has continued discussions with another, but unnamed, potential investor who was in talks with Virgin Orbit prior to the talks with Brown.
The deal comes as Virgin Orbit scrambles to replenish its coffers and avoid a potential bankruptcy filing, CNBC previously reported.
Virgin Orbit did not respond to CNBC’s request for comment. Portal first reported on the deal talks.
Shares of Virgin Orbit are up 50% in early trade Wednesday from the stock’s previous close of 44 cents a share.
Late on Tuesday, CEO Dan Hart told employees a “small” team would get back to work on Thursday. Hart described this as the “first step” in a “gradual resumption of operations” while Virgin Orbit is extending unpaid leave for the rest of the company’s more than 750 employees “until at least Monday”.
Hart said Tuesday the company made “some important progress” toward a financing deal this week.
Brown is chairman of the family office of the same name, Matthew Brown Cos. in Dallas and General Partner at Energent Energy, an asset manager focused on renewable energy and climate protection investments.
According to PitchBook, he’s had his eye on the space sector for years, specifically the rocket launch business, with several previous investments in Elon Musk’s SpaceX, Rocket Lab and Astra. His family office was founded in 2008 and has about $364 million in “dry powder,” according to PitchBook.
The cash injection comes at a critical time in Virgin Orbit’s rocket development.
The company developed a system that uses a modified 747 jet to send satellites into space by dropping a missile under the plane’s wing mid-flight. However, the company’s final mission suffered an in-flight failure, as a problem during launch caused the rocket to fail to reach orbit and crash into the ocean.
The company has been looking for new funds for several months, with majority owner Sir Richard Branson unwilling to continue funding the company. Branson, who spun off Virgin Orbit from Virgin Galactic in 2017, currently owns 75% of the company, while Emirati sovereign wealth fund Mubadala holds the second-largest stake at 18%.