Shulou(Shulou.com)11/24 Report--

March 21, according to people familiar with the matter, the leadership of Virgin orbit, a US rocket manufacturer, is trying to find investment to keep the company running. But if an investment agreement cannot be reached in the short term, the company could file for bankruptcy as early as this week.

It follows reports that Virgin Rail suspended operations last week and asked most of its employees to take a temporary leave while looking for new investors or potential acquirers. Virgin Rail CEO Dan Hart and other executives meet daily with interested investors, according to people familiar with the matter.

At a staff meeting last week, Hart said the company hopes to release an update as soon as Wednesday. At the same time, top talent is leaving. Many of Virgin's roughly 750 employees are looking for other job openings. It is reported that these people, including executives, senior engineers and project managers, are actively looking for new jobs.

While Virgin Rail could still avoid bankruptcy, people familiar with the matter said employees began to panic as the company struggled to reach an investment or acquisition agreement. A potential buyer is hesitant about the proposed sale price of nearly $200 million, which is slightly lower than the company's market capitalization as of Friday, a person familiar with the matter said.

Meanwhile, Virgin Rail could file for bankruptcy as early as this week, according to people familiar with the matter. The company has hired Alvarez & Marsal and Ducera Partners to help draft restructuring plans in the event of insolvency. A spokeswoman for Virgin Rail declined to comment.

Virgin Orbital is working to develop a system to launch satellites into space, which uses a modified Boeing 747 jet as the parent plane and then launches a rocket under the wing. The company's last mission failed in flight and the rocket failed to enter the final orbit.

Virgin orbit was spun off from Virgin Galaxy, a subsidiary of Richard Richard Branson, in 2017, and Branson is its largest shareholder with a 75 per cent stake. Mubadala, the UAE sovereign wealth fund, holds an 18 per cent stake in Virgin Rail, making it the second-largest shareholder.

Virgin Rail's cash reserves have always been insufficient. The company went public near the end of the SPAC boom in December 2021 and failed to raise enough money in the market as its sister Virgin Galaxy did. Virgin Galactic has more than $1 billion in cash reserves by selling stocks and bonds.

Virgin Rail aims to raise $483 million through its SPAC process, but a large number of redemptions mean it has raised less than half of its expected target, only $228 million. The money raised by the company mainly comes from companies such as Boeing and AE Industrial Partners.

Virgin track has been looking for investment for months. Branson is reluctant to provide further funding for the company, according to people familiar with the matter. Virgin orbit has raised $60 million from Branson's Virgin Group investment arm through debt financing since the fourth quarter. At about the same time, Virgin track hired Goldman Sachs and Bank of America to explore other financial opportunities, including the sale of minority stakes to overall sales.

George Matthieson (George Mattson), a board member of Virgin Rail, was deeply involved in the sale process, according to people familiar with the matter. Matthieson worked at Goldman Sachs for nearly 20 years before co-founded SPAC, NextGen, which helped Virgin orbit go public at a valuation of $3.7 billion.

Virgin track has approved a severance plan for senior executives, according to its latest regulatory filing. If they are fired after a change in control of the company, the plan will take effect. Under the plan, Hart, Jim Simpson, chief strategy officer, and Tony Gingiss, chief operating officer, will receive base compensation and annual bonuses. If fired, Hart will receive a cash severance payment equivalent to 200 per cent of his base salary, or $511008, according to FactSet.

Virgin Rail shares have continued to fall since the suspension, closing at 52 cents on Monday.

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