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.

Richard Branson’s Virgin Orbit temporarily suspends operations, lays off most employees

Sir Richard Branson founded Virgin Orbit in 2017. (PATRICK T. FALLON/AFP via Getty Images | Virgin Orbit/Getty Images)

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.

Virgin Orbit Boeing Jet

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)

Virgin Orbit rocket launches seven U.S. defense satellites

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.

Virgin Orbit logo

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

Richard Branson’s Virgin Orbit Accelerates Space Investments

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

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VORB Virgin Orbit 0.44 -0.08 -14.64%

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.

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