NEWQUAY, ENGLAND – JANUARY 09: A general view of Cosmic Girl, a Boeing 747-400 aircraft carrying a LauncherOne rocket under the left wing, during final preparations at Newquay Airport in Cornwall on January 9, 2023 in Newquay, UK. Virgin Orbit launches its LauncherOne rocket from Cornwall Spaceport, marking the primary ever orbital launch from the UK. The mission was named Start Me Up after the Rolling Stones hit. (Photo: Matthew Horwood/Getty Images)
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Virgin Orbit is extending its unpaid hiatus again to continue investing in its lifebuoy, CEO Dan Hart told employees in a company-wide email.
Among the company’s late-stage talks, including with private investor Matthew Brown, collapsed over the weekend, people aware of the matter told CNBC.
In response to an email sent to employees Sunday night, Hart planned to temporary employees on the corporate’s operational status at an all-employee meeting at 4:30 p.m. EST on Monday afternoon. On the last minute, that meeting was rescheduled “no later than Thursday,” Hart said in Monday’s staff memo.
“Our investment discussions have been very dynamic over the previous couple of days, are ongoing, and will not be yet on the stage where we will provide a full update,” Hart wrote in an email to employees that was viewed by CNBC.
Brown told CNBC’s Worldwide Exchange last week that he was in final talks about investing in the corporate. An individual aware of the terms told CNBC that the investment could be $200 million and awarded Brown a controlling interest. But discussions between Virgin Orbit and the Texas investor have stalled and collapsed late last week, a friend told CNBC. On Saturday, those discussions ended, the person said.
Individually, one other person said talks with one other potential buyer collapsed Sunday night.
People asked to stay anonymous to debate private negotiations. A Virgin Orbit representative declined to comment.
Hart promised greater than 750 Virgin Orbit employees “each day” updates this week. Most staff remain on unpaid leave, which Hart announced on March 15. Last week, a “small” team of Virgin Orbit employees returned to work in what Hart described as “step one” in a “gradual resumption of operations”. “with the intention of preparing the rocket for the corporate’s next launch.
Virgin Orbit shares closed at 54 cents a share on Monday, falling below $1 a share after the corporate went on hiatus.
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Virgin Orbit has developed a system that uses a modified 747 jet to launch satellites into space by dropping a rocket from under the plane’s wing mid-flight. But the corporate’s last mission resulted in a mid-flight failure, and an issue during launch caused the rocket to miss orbit and crash into the ocean.
The corporate has been searching for latest funding for several months, with majority owner Sir Richard Branson unwilling to finance the corporate further.
Virgin Orbit was spun off from Branson’s Virgin Galactic in 2017 and considers the billionaire as its largest shareholder, with a 75% stake. Mubadala, the Emirati sovereign wealth fund, holds the second largest stake in Virgin Orbit at 18%.
The corporate hired bankruptcy firms to attract up contingency plans in case it couldn’t discover a buyer or investor. Branson has priority over Virgin Orbit’s assets as the corporate raised $60 million in debt from Virgin Group’s investment arm.
On the identical day Hart told employees Virgin Orbit was shutting down operations, its board of directors approved a “golden parachute” severance plan for top executives in case they were laid off “as a results of a change of control” of the corporate.