Virgin Orbit is in talks to raise $200 million from Matthew Brown

A $200 million investment is in final discussion between Virgin Orbit and Texas-based investor Matthew Brown, sources told Trade Algo.

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One of the sources claimed that negotiations between Virgin Orbit and Brown started last week. This was shortly after the firm announced it was suspending operations and laying off the majority of its workforce in order to find financial support. The person, who requested anonymity to speak about confidential negotiations, said that Brown would receive a controlling interest in the rocket manufacturer.

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The parties hope to reach a settlement by Thursday.

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The company has also kept in touch with another unnamed possible investor who was in negotiations with Virgin Orbit before the discussions with Brown. This is according to a source familiar with the situation.

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According to a previous report by Trade Algo, the acquisition comes as Virgin Orbit struggles to replenish its cash reserves and fend off the possibility of filing for bankruptcy.

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Trade Algo asked Virgin Orbit for a statement, but they didn't give one. The first coverage of the negotiations for a settlement came from Reuters.

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Virgin Orbit shares increased 50% from the stock's previous close of 44 cents per share to the opening of trade on Wednesday.

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CEO Dan Hart announced to staff late on Tuesday that a "small" team would resume work on Thursday. While Virgin Orbit is extending the unpaid furlough for the remainder of the more than 750-person company "until at least Monday," Hart termed this the "first step" in an "incremental restoration of operations."

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In order to secure a financial deal, Hart stated on Tuesday that the company had "made some critical progress" this week.

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Brown serves as a general partner at Energent Energy. This asset manager specializes in renewable energy and climate investments, as well as chairman of the Matthew Brown Company, a family business in Dallas.

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With numerous early investments in Elon Musk's SpaceX, Rocket Lab, and Astra, he has been watching the space industry for years, notably the rocket launch business, according to PitchBook. His family office, established in 2008, has about $364 million in "dry powder," according to Pitchbook.

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The financial boost occurs at a crucial juncture in Virgin Orbit's rocket development.

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The company created a mechanism that launches rockets mid-flight from under the wing of a modified 747 jet to launch satellites into orbit. Nevertheless, a launch-related problem resulted in the company's most recent mission failing mid-flight, causing the rocket to crash into the water instead of entering orbit.

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As majority owner Sir Richard Branson has refused to provide additional funding for the business, it has been searching for new funding for a number of months. Branson, who separated Virgin Orbit from Virgin Galactic in 2017, currently owns 75% of the business, with Mubadala, the sovereign wealth fund of the Emiratis, owning the remaining 18%.