NEWQUAY, ENGLAND – JANUARY 09: A general view of Cosmic Girl, a Boeing 747-400 aircraft with the LauncherOne missile under its left wing, as final preparations are made at Cornwall Airport Newquay on January 9, 2023 in Newquay, UK. Virgin Orbit launches its LauncherOne rocket from the spaceport in Cornwall, marking the first-ever orbital launch from the UK. The mission has been named Start Me Up, after the Rolling Stones hit. (Photo by Matthew Horwood/Getty Images)
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Virgin Orbit is once again extending its unpaid pause in operations to continue pursuing a lifeline investment, CEO Dan Hart told employees in a company-wide email.
Some of the company’s late-stage deal talks, including with private investor Matthew Brown, fell through over the weekend, people familiar with the matter told CNBC.
Hart previously planned to update employees on the operational status of the company during an all-employee meeting Monday afternoon at 4:30 p.m. ET, according to an email sent to employees Sunday evening. At the last minute, that meeting was moved to “thursday at the latest,” Hart said in the employee memo on Monday.
“Our investment discussions have been very dynamic over the past few days, they are ongoing and not yet at a stage where we can provide a full update,” Hart wrote in the email to employees, which was viewed by CNBC.
Brown told CNBC’s “Worldwide Exchange” last week that he was in final talks to invest in the company. A person familiar with the terms told CNBC the investment would have been $200 million and would have granted Brown a controlling interest. But talks between Virgin Orbit and the Texas-based investor stalled and fell apart late last week, a friend told CNBC. As of Saturday, those discussions had ended, the person said.
Separately, another person said talks with another potential buyer broke down Sunday night.
The people asked to remain anonymous to discuss private negotiations. A Virgin Orbit representative declined to comment.
Hart promised Virgin Orbit’s more than 750 employees “daily” updates this week. Most of the staff remain on an unpaid leave that Hart announced on March 15. Last week, a “small” team of Virgin Orbit employees returned to work in what Hart described as the “first step” in a “staged resumption of operations,” with the aim of preparing a rocket for the next launch of Company.
Shares of Virgin Orbit closed Monday at 54 cents a share, after falling below $1 a share following the company’s hiatus.
Virgin Orbit developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket from under the plane’s wing in flight. But the company’s latest mission went awry mid-flight, with a problem during launch that caused the rocket to fail to reach orbit and crash into the ocean.
The company has been seeking new funds for several months, with majority shareholder Sir Richard Branson unwilling to fund the company further.
Virgin Orbit spun off from Branson’s Virgin Galactic in 2017 and considers the billionaire the largest stakeholder, with a 75% stake. Mubadala, the Emirati sovereign wealth fund, has the second largest stake in Virgin Orbit at 18%.
The company hired bankruptcy firms to prepare contingency plans in case it couldn’t find a buyer or investor. Branson has first priority over Virgin Orbit’s assets, as the company has raised $60 million in debt from Virgin Group’s investment arm.
On the same day Hart told workers that Virgin Orbit was closing operations, the board of directors approved a “golden parachute” departure plan for top executives, in case they are fired “following a change in control” of the company.
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