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Report: Virgin Orbit Eyes $200M Investment, Some Employees to Return to Work

By Doug Messier
Parabolic Arc
March 22, 2023
Filed under , , ,
Report: Virgin Orbit Eyes $200M Investment, Some Employees to Return to Work
Cosmic Girl Boeing 747 (Credit Virgin Orbit)

Virgin Orbit stock rose by about 60 percent to $0.72 on Wednesday after Reuters reported that the company is negotiating a $200 million investment from Matthew Brown Companies to bring Richard Branson’s struggling launch provider back to full operations.

Virgin Orbit’s board agreed to move forward with the deal at a meeting held on Tuesday, according to a person with direct knowledge of the matter.

Under the deal, Matthew Brown will be entitled to convert his $200 million investment in Virgin Orbit’s preferred shares into common shares at the volume weighted average price in the 30 days before the deal is signed.

The converted shares will possess the same voting rights as the common stock. Virgin Investments is currently the largest shareholder with a stake of nearly 75%.

The parties could finalize the investment deal this week. Matthew Brown has invested in three other launch companies — SpaceX, Rocket Lab and Astra Space.

Reuters also reported that the company would end a week-long pause in operations on Thursday by bringing bring back a small number of furloughed employees to prepare a LauncherOne satellite booster for an upcoming flight.

Virgin Orbit initiated the operational pause and furloughed almost all its employees last week amid mounting losses, dwindling cash reserves and a failure to ramp up its launch cadence. LauncherOne has flown only six times since its maiden launch in May 2020, with four successes and two failures. The company had planned to launch as many as six times last year, but only managed two.

LauncherOne’s most recent flight in January from Spaceport Cornwall in England failed after a $100 filter broke loose in a fuel line. The failure destroyed nine satellites. The booster’s other failure occurred with no payload aboard during the rocket’s maiden flight.

Branson has invested $60 million into the company through Virgin Investments Ltd. (VIL) since early November. In the event of a default, VIL has the right to foreclose on “substantially all of their respective assets, including all aircrafts, aircraft engines (including spare aircraft parts) and related assets, other than certain customary excluded assets and permitted liens described in the Convertible Note.”

Virgin Orbit’s cash reserves had dwindled amid its struggles to increase its launch rate. Virgin Orbit’s cash and cash equivalents dwindled from $194.2 million at the end of 2021 to $71.2 million at the end of the third quarter on Sept. 30.

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