Virgin Orbit nears deal to raise $200M from venture capital investor
Virgin Orbit paused operations and furloughed most employees, but will reportedly bring back a small team to work on rocket upgrades
Billionaire Richard Branson's Virgin Orbit Holdings is close to a deal for a $200 million investment from Texas-based venture capital investor Matthew Brown.
The capital injection for the cash-strapped aerospace company would come in the form of a private share placement, according to a term sheet seen by Reuters.
The company saw its market capitalization slump to a record low of $150 million on Tuesday from more than $3 billion two years ago when it went public through a blank-check deal.
Virgin Orbit paused all operations and furloughed most employees earlier this month, about two months after the aerospace company suffered a mid-flight rocket failure while trying to send several satellites into space.
RICHARD BRANSON'S VIRGIN ORBIT TEMPORARILY PAUSING OPERATIONS AND FURLOUGHING MOST EMPLOY
Sir Richard Branson founded Virgin Orbit in 2017. (PATRICK T. FALLON/AFP via Getty Images | Virgin Orbit / Getty Images)
FOX Business has reached out to Virgin Orbit for comment.
Virgin Orbit had received about $35 million of capital injections from Branson's Virgin Investments in recent months and is exploring strategic options. It was also in talks for fresh funding.
The deal involving Virgin Orbit and Matthew Brown reportedly could be completed by Friday, according to the term sheet, but is not binding.
A view of Richard Branson's Virgin Orbit, with a rocket underneath the wing of a modified Boeing 747 jetliner. (REUTERS/Gene Blevins / Reuters Photos)
VIRGIN ORBIT ROCKET LAUNCHES 7 US DEFENSE SATELLITES
Virgin Orbit's board agreed to move forward with the deal at a meeting held on Tuesday, a person familiar with the matter told Reuters.
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.
In this photo illustration, a Virgin Orbit Holdings logo seen displayed on a smartphone screen. (Rafael Henrique/SOPA Images/LightRocket via Getty Images / Getty Images)
RICHARD BRANSON’S VIRGIN ORBIT ADDS TO SPACE INVESTING LIFTOFF
Virgin Investments is currently the largest shareholder with a stake of nearly 75%.
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In the meantime, Virgin Orbit plans to recall a small team from the furlough on Thursday to work on rocket upgrades.
Reuters contributed to this report.