A general view of Cosmic Girl, a repurposed Boeing 747 aircraft carrying a LauncherOne rocket under its left wing, as final preparations are made at Cornwall Airport Newquay on January 9, 2023 in Newquay, United Kingdom.
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, worth an injection of $200 million.
Virgin Orbit and Brown began deal talks last week, one of the people said, around the same time the company announced it was halting operations and laying off most employees in search of a financial lifeline. Brown will get a controlling stake in the rocket maker, according to the people, who asked to remain anonymous to discuss private negotiations.
The parties aim to close the deal as soon as Thursday, the people said.
At the same time, a person familiar with the matter said, the company is still in talks with another, but unnamed potential investor, who was in talks with Virgin Orbit before the talks with Brown.
The deal comes as Virgin Orbit scrambles to rebuild its cash coffers and avoid a potential bankruptcy filing, CNBC previously reported.
Virgin Orbit did not respond to CNBC’s request for comment. Reuters deal talks were first reported.
Virgin Orbit shares rose 50% in early trading on Wednesday from the stock’s previous close of 44 cents per share.
Late Tuesday, CEO Dan Hart told employees that a “small” team would return to work on Thursday. Hart described it as a “first step” in an “incremental resumption of operations,” as Virgin Orbit extends unpaid furloughs for the remaining more than 750-person company “through at least Monday.”
Hart said Tuesday that the company “made some important progress” this week toward landing a financing deal.
Brown is the chairman of the eponymous family office in Dallas, Matthew Brown Cos. and general partner at Energent Energy, an asset manager focused on renewables and climate investments.
He has been eyeing the space sector for years, particularly the rocket launch business, with multiple prior investments in SpaceX, Rocket Lab and Elon Musk’s Astra, according to PitchBook. His family office was founded in 2008 and, per PitchBook, has about $364 million in “dry powder.”
The cash infusion comes at a critical moment in Virgin Orbit’s rocket development.
The company has developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket from under the aircraft’s wing mid-flight. But the company’s last mission suffered a mid-flight failure as an issue during launch caused the rocket to miss 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 fund the company yet. 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%.
