Days after Virgin Orbit halted operations and furloughed staff, comes a report it is close to securing emergency funding
Sir Richard Branson’s cash-strapped Virgin Orbit Holdings is reportedly close to securing much needed emergency funding.
Reuters reported that Virgin Orbit is nearing a deal for a $200-million investment from Texas-based venture capital investor Matthew Brown via a private share placement.
Virgin Orbit had ambitious plan to carry out the first-ever satellite launch from UK soil, but this went wrong in January 2023 after the LauncherOne rocket failed during the second stage ignition to deploy nine small satellites into lower Earth orbit, due to an ‘anomaly’.
It should be noted that Virgin Orbit’s first attempted launch in 2020 also failed, but it has since carried out four successful satellite deployments.
The January 2023 firing of LauncherOne was from a converted 747 jet called Cosmic Girl that took off from Spaceport Cornwall, based at Cornwall Newquay Airport.
Shortly after that, the anomaly wrecked the spaceflight.
In mid February the California-based company identified a displaced fuel filter that caused a Newton 4 engine to overheat, which in turn caused the engine and nearby components to malfunction and for “thrust to terminate prematurely.”
Then matters became worse when it was reported at the weekend that Virgin Orbit had begun drawing up detailed contingency plans for its insolvency – days after halting its operations and furloughing its workforce.
Virgin Orbit is 75 percent-owned by Sir Richard’s holding company, and in recent months it has received about $35 million of capital injections from Sir Richard’s Virgin Investments.
Last week Virgin Orbit said was exploring its options and was in talks for fresh funding, after its shares listed on the Nasdaq exchange plummeted following the failure of its inaugural British mission in January.
Indeed, Virgin Orbit’s market capitalisation slumped to a record low of $150 million, from more than $3 billion two years ago when it went public.
Now Reuters has reported that Virgin Orbit is nearing a deal for a $200-million investment from Texas-based venture capital investor Matthew Brown.
The space startup did not comment on the likely deal, but said on Wednesday it would resume operations on 23 March and prepare for its next mission by recalling some of its employees, sending its shares up 60 percent in premarket trading.
Matthew Brown Companies did not immediately respond to a request for comment, Reuters reported.
Virgin Orbit and Matthew Brown are reportedly aiming to close the deal on Friday, according to the term sheet seen by Reuters, which is not binding and remains subject to final agreement.
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.