Virgin Orbit nears deal to raise $200M from venture capital investor

Billionaire Richard Branson’s Virgin Orbit Holdings is nearing a $200 million investment deal from Texas-based venture capital investor Matthew Brown.

Capital injections for cash-strapped aerospace companies come in the form of private equity issuances, according to a term sheet seen by Reuters.

The company’s market capitalization plummeted from more than $3 billion when it went public two years ago on a blank check to a record low of $150 million on Tuesday.

Virgin Orbit suspended all operations earlier this month and furloughed most of its employees. This comes about two months after the aerospace company suffered an in-flight rocket failure while trying to send several satellites into space.

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FOX Business reached out to Virgin Orbit for comment.

Virgin Orbit, which has received about $35 million in capital injection from Branson’s Virgin Investments in recent months, is exploring strategic options. It was also in the process of negotiating new funding.

A deal involving Virgin Orbit and Matthew Brown could be completed by Friday, according to the termsheet, but it is not binding.

A view of Richard Branson’s Virgin Orbit with a rocket under the wing of a modified Boeing 747 jetliner. (REUTERS/Gene Blevins / Reuters Photos)

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Virgin Orbit’s board of directors agreed to proceed with the deal at a meeting held on Tuesday, a person familiar with the matter told Reuters.

Under the transaction, Matthew Brown will have the right to convert his $200 million investment in Virgin Orbit preferred stock into common stock at a volume-weighted average price 30 days before the transaction is signed.

This photo illustration shows the Virgin Orbit Holdings logo displayed on a smartphone screen. (Rafael Enrique/SOPA Images/LightRocket via Getty Images/Getty Images)

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Virgin Investments is now the largest shareholder with nearly 75% stake.

In the meantime, Virgin Orbit plans to bring back a small team from vacation on Thursday to work on its rocket upgrades.

Reuters contributed to this report.