Virgin Orbit Extends Shutdown, Lifeline Investment Talks Collapse

According to a company-wide email from CEO Dan Hart, Virgin Orbit will be extending its operational pause again to pursue an investment that could save the company.

The company's talks with potential investors, including private investor Matthew Brown, reportedly fell through over the weekend. Hart had originally planned to provide an update on the company's operational status during an all-hands meeting on Monday afternoon, but that meeting was postponed until Thursday, as stated in the employee memo sent 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 fulsome update” - Dan Hart, Virgin Orbit CEO

According to an anonymous source familiar with the matter, Texas-based investor Matthew Brown was in the final stages of negotiations to invest $200 million in Virgin Orbit and acquire a controlling stake in the company. However, the talks ultimately stalled and broke down late last week, leading to the end of discussions on Saturday.

In addition, another anonymous source reported that talks with a separate potential buyer also broke down on Sunday evening.

In an effort to keep Virgin Orbit's over 750 employees informed during this critical time, CEO Dan Hart has pledged to provide daily updates throughout the week.

The majority of the company's workforce is still on an unpaid furlough that Hart had previously announced on March 15th. However, last week, a select team of employees returned to work in what Hart referred to as the initial stage of a gradual resumption of operations, with the goal of preparing a rocket for Virgin Orbit's upcoming launch.

The company's stock fell 33% on Monday, with an additional 6.6% drop after hours. The company stock down has now fallen more than 50% in 2 weeks.

via Yahoo Finance

Virgin Orbit was established as a spin-off of Richard Branson's Virgin Galactic company in 2017. Branson remains its largest stakeholder with a 75% ownership stake.

Virgin Orbit has been seeking new sources of funding for several months as majority owner Sir Richard Branson has been reluctant to provide further financial support.

To prepare for the worst-case scenario of being unable to secure an investor or buyer, Virgin Orbit has enlisted the services of bankruptcy firms to develop contingency plans.