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 in Newquay, United Kingdom on January 9, 2023.
Matthew Harwood | Good pictures
Virgin Orbit is in final talks to raise funding from Texas-based investor Matthew Brown, two people familiar with the deal told CNBC about a $200 million injection.
Virgin Orbit and Brown began contract talks last week, one of the people said, while the company announced it was suspending its operations and laying off most of its staff to seek financial recovery. Brown will take a controlling stake in the rocket builder, according to the people, who asked to remain anonymous to discuss private negotiations.
The parties aim to complete the deal by Thursday, the people said.
At the same time, a person familiar with the matter said, the company continued to speak with another, as-yet-unnamed potential investor, who was in discussions with Virgin Orbit ahead of talks with Brown.
The deal comes as Virgin Orbit struggles to rebuild its coffers and avoid a bankruptcy filing, CNBC previously reported.
Virgin Orbit did not respond to CNBC’s request for comment. Reuters First announced contract talks.
Virgin Orbit’s shares jumped 50% in early trading on Wednesday from the stock’s previous close of 44 cents.
Late Tuesday, CEO Don Hart told employees that a “small” team would return to work on Thursday. Hart described it as the “first step” in “resuming operations” while Virgin Orbit extended unpaid furloughs for more than 750 people “until at least Monday”.
Hart said Tuesday that the company has “made some important progress” this week in closing a financing deal.
Brown is chairman of Matthew Brown Companies, a Dallas family office named after Brown, and general partner of Energent Energy, an asset manager focused on renewable and climate investments.
According to Pitchbook, Elon Musk has had an eye on the space industry, particularly the rocket launch business, with several prior investments in SpaceX, Rocket Lab and Astra. His family office was founded in 2008 and for Pitchbook, the “dry powder” is about $364 million.
The cash injection comes at a critical moment in Virgin Orbit’s rocket development.
The company developed a system that uses a modified 747 jet to launch satellites into space by launching a rocket from the center of the plane’s wing. But the company’s last mission failed mid-flight as a problem during launch caused the rocket to fall into the ocean before reaching orbit.
The company has been looking for new funding for months, with majority owner Sir Richard Branson unwilling to fund the company further. Branson, who spun off Virgin Orbit from Virgin Galactic in 2017, currently owns 75% of the company, while the Emirati’s sovereign wealth fund, Mubadala, holds the second-largest stake at 18%.