Richard Branson’s Virgin Orbit Holdings Inc. is pausing all operations for a week starting Thursday as it seeks a funding lifeline, reports said. The satellite launch company also plans to furlough nearly all of its employees.
Following the news, Virgin Orbit shares fell about 33 percent in after-hours trading on Wednesday, and are currently down around 42 percent in pre-market activity on Nasdaq. The company had lost around 5 percent in regular trading on Wednesday.
Chief Executive Dan Hart reportedly said that the furlough was intended to buy time to finalize a new investment plan that would help the firm out of its financial troubles.
The company executives briefed staff on the planned operational pause in an all-hands meeting on Wednesday. An update on the furlough and funding situation is expected to be announced by next week.
The furlough is said to be unpaid, though employees can cash in paid time off. Only a small team will continue to work.
As per the reports, the company recently secured funds in the form of debt through an investment unit of Branson’s Virgin Group. The company raised $25 million in an unsecured convertible note in November, as well as $20 million in senior secured convertible notes in December and $10 million in February. With these notes, Virgin Group is said to have first-priority to Virgin Orbit’s assets.
The rocket-building company’s last Start Me Up mission, which was the first orbital launch attempt in history conducted from western Europe, in January suffered a mid-flight failure and the rocket crashed into the ocean without reaching the orbit, adding to its financial struggles.
Following this, the space launch systems provider had launched an internal probe into the matter.
According to reports, Virgin Orbit’s spokesperson recently said its investigation is nearly complete and that its next production rocket with the needed modification incorporated is in final stages of integration and test.
CEO Hart recently had canceled a scheduled appearance on a panel during a space industry conference in Washington, D.C.
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