Virgin Orbit Extends Unpaid Furlough As It Continues Seeking Funding

Virgin Orbit's search for funding isn't over yet.

The company is extending its unpaid employee furlough to an undisclosed date to grant them more time to acquire a financing deal to support its operations.

Virgin orbit previously announced the start of its unpaid employee furlough in mid-March that would supposedly only last for a week.

Virgin Obit Unpaid Furlough Extension Details

Virgin Orbit managed to get a hold of Texas-based private investor Matthew Brown to help finance their operations, but relations between the two eventually soured.

According to a CNBC report, citing people familiar with Virgin Orbit's operations, it was unable to close the deal with Brown, which was valued to be worth $200 million. Sources mentioned that while Brown had a controlling stake in the company, discussions for the investment stalled and broke down over the weekend.

The company also managed to secure another party to help finance it, but discussions about the deal fell through due to an undisclosed reason.

While the situation may look grim for Virgin Orbit, it had a backup plan in the form of two restructuring films that would potentially help it reorganize its management, finances, and operations, per Sky News.

Things are not looking well for the company on the employee side; Virgin Orbit CEO Dan Hart rescheduled his all-hands meeting, which was meant to inform employees about what happened to the company, at the last minute to "no later than Mar. 30." Hart explained that while its investment discussions have been "very dynamic" over the past few days and that they are ongoing, there was no amount of progress significant enough for the company to provide a "fulsome update."

Despite the unpaid furlough continuing for the company and its employees, a small employee team already returned to work last week as part of its expected "incremental resumption of operations, per Engadget. Additionally, the company is planning for its next planned rocket launches despite the lack of funding and an unclear future.

In fact, Poland-based satellite manufacturer SatRev with Virgin orbit to use its LauncherOne rocket and Cosmic Girl carrier plans to launch more of SatRev's company's satellites in 2023 and beyond. The launch, which has no scheduled date yet, will occur from the Mojave Air and Space Port in California.

Virgin Orbit's Initial Furlough Details

Hart previously announced it is halting Virgin Orbit's operations for a week to shore up its finances and find more funding for the company to use. According to Space News' source, the company is dealing with a cash flow issue that caused its shares to significantly drop following its failed UK launch.

Virgin Orbit's financial challenges have been brewing since late 2022, with the company already operating at a loss since 2022. To save itself, the company reportedly raised $60 million in four tranches from Virgin Investments Limited (VIL) through loans with 12% interest rates. The company secured these loans with its assets, giving VIL "first-priority security interest" to them, including its Cosmic Girl Boeing 747 aircraft, which it uses to launch its LauncherOne rocket.