Virgin Orbit's would-be white knight and a $200 million rescue that fell flat
Business
Virgin Orbit's would-be white knight and a $200 million rescue that fell flat
WASHINGTON (Reuters) - As the fortunes of Richard Branson's Virgin Orbit were crashing to Earth last month, a little-known investor called Matthew Brown appeared offering a $200 million rescue.
Within two days of being contacted by Brown, Virgin Orbit Chief Executive Dan Hart had secured board backing for a preliminary agreement with the 33-year-old Texas-based investor, according to related documents and email exchanges reviewed by Reuters and three people with knowledge of the discussions.
"We have had our board meeting this morning with agreement to move forward, so I now have the buy-in I need," Hart told Brown in a March 21 email seen by Reuters.
In a separate email to staff that day, Hart offered a hopeful note for Virgin Orbit's 750 workers, most of who had been furloughed to save cash when the company halted its business earlier in March. In the email, Hart said the Long Beach, California-based company would begin an "incremental resumption" of operations.
There would be no full resumption of operations.
The potential deal with Brown unraveled in less than a week with Virgin Orbit severing contact and threatening to take legal action against him if he revealed confidential details about the potential investment, according to the cease-and-desist letter reviewed by Reuters, and the three people, who declined to be named due to the sensitivity of the matter.
The previously unreported details of a deal that was never done, provide a window into Virgin Orbit's failed scramble to avoid bankruptcy. The company, which had been worth $3.8 billion in late 2022 and counted the U.S. military among its biggest clients, filed for Chapter 11 this week.
Hart, a former Boeing veteran, did not respond to a request for comment on the talks with Brown. Virgin Group, which owns 75% of Virgin Orbit, also declined to comment for this article. The group is providing financing to Virgin Orbit as the satellite launch company seeks a buyer in bankruptcy.
