Will Matthew Brown save Virgin Orbit from bankruptcy?
Billionaire Richard Branson's Virgin Orbit, looking for new funds, is close to a deal for a $200 million investment from venture capitalist Matthew Brown via a private equity placement
Virgin Orbit, the aerospace company of Richard Branson's Virgin group (with a majority stake of 75%), on the verge of bankruptcy, could be saved.
The company is close to an agreement with Matthew Brown, a Texas venture capital operator, who would be willing to invest 200 million dollars through a placement of private shares. Reuters reveals it.
The space company did not comment on the likely deal, but said today it will resume operations on March 23 and prepare for its next mission by recalling some of its employees. In fact, the leave of almost all of its 750 employees began on March 16, after Virgin Orbit has struggled in recent months to raise funds and suffered a setback in January with the failure of its first attempt to put the satellites launching from Great Britain. The company has developed a system that uses a modified 747 jet to send satellites into space by dropping a flare from under the plane's wing during flight. But the company's latest mission suffered a mid-flight failure, with a problem during launch that prevented the rocket from reaching orbit.
Sending the workforce home was intended to buy Virgin Orbit more time to finalize an investment plan and avoid bankruptcy. "The company has been seeking new funding for several months, with majority owner Sir Richard Branson unwilling to further fund the company," reports CNBC .
The deal with Matthew Brown would therefore give a boost to confidence for the satellite launch company which has seen declining liquidity and mounting losses in a highly competitive market in recent quarters, adds Reuters .
All the details.
NEAR THE DEAL WITH MATTHEW BROWN
Virgin Orbit and Matthew Brown are aiming to close the deal on Friday, according to the term sheet seen by Reuters , which is non-binding and remains subject to a definitive agreement.
Under the agreement, Matthew Brown will have the right to convert his $200 million investment in Virgin Orbit preferred stock into common stock at the volume-weighted average price in the 30 days prior to signing the agreement.
The converted shares will have the same voting rights as ordinary shares. Virgin Investments is currently the largest shareholder with an almost 75% stake.
WHAT HAPPENS TO VIRGIN ORBIT IN THE STOCK EXCHANGE
The rumors of Reuters on the possible 200 million financing make the shares of Virgin Orbit take off on Wall Street, which at 15:30 on March 22 gain 50%.
Virgin Orbit's market cap plunged to a record low of $150 million on Tuesday from more than $3 billion two years ago when it went public. The company, which has received about $35 million in capital injections from Branson-based Virgin Investments in recent months, said last week it was exploring various options and was in talks for new financing.
THE RED IN THE BUDGET
In addition, the company reported a loss of nearly $44 million for the third quarter and had cash reserves of approximately $71, a sharp decrease from $122 million at the end of June.
READY TO RECOMMEND OPERATIONALITY AFTER THE FAILED LAUNCH LAST JANUARY
A spokesperson for Virgin Orbit said in a statement that the company was aiming for an "incremental resumption" of operations to support its upcoming launch.
“Our first step will begin on Thursday of this week when we plan to get a subset of our team back to focus on critical areas for our next mission,” the company said.
Virgin Orbit is therefore not giving up and is committed to planning new launches. On January 10 , the historic attempt by the United Kingdom to become the first European nation to put satellites into orbit failed. The rocket launched by Comisc Girl, a jumbo Boeing 747 of aerospace company Virgin Orbit, which successfully took off from the runway at Spaceport Cornwall, suffered a malfunction during the mission , which led to the loss of its payload of nine satellites. If successful, the UK would have become the ninth country in the world capable of putting satellites into orbit and the first to launch commercial satellites from Western Europe.
In an update last week, Virgin Orbit said its internal investigation is nearly complete, with the rocket for its next launch with modifications and "in the final stages of integration and testing".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/matthew-brown-salvera-virgin-orbit-dalla-bancarotta/ on Thu, 23 Mar 2023 05:29:26 +0000.