Virgin Orbit is closing in on a $200 million deal on Thursday

A general view of Cosmic Girl, a re-routed Boeing 747 carrying a LauncherOne missile under its left wing, as final preparations take place at Cornwall Airport Newquay on January 9, 2023 in Newquay, United Kingdom.

Matthew Horwood | Getty Images

Virgin Orbit is in final talks to raise money from Texas-based investor Matthew Brown, two people familiar with the deal told CNBC, worth up to $200 million.

Virgin Orbit and Brown began deal talks last week, the person said, around the same time the company announced it would pause operations and allow most employees to seek a financial lifeline. Brown will receive a controlling stake in the rocket builder, according to the people, who asked not to be identified to discuss private negotiations.

People said both sides aim to close the deal as soon as Thursday.

At the same time, a person familiar with the matter said, the company continued to speak to another potential investor, who was not named, who was in discussion with Virgin Orbit prior to the talks with Brown.

The deal comes as Virgin Orbit struggles to rebuild its cash coffers and avoid filing for potential bankruptcy, CNBC previously reported.

Virgin Orbit did not respond to CNBC’s request for comment. Reuters I first reported the deal talks.

Virgin Orbit shares were up 50% in early trading Wednesday from the stock’s previous close of 44 cents a share.

Late Tuesday, CEO Dan Hart told staff that a “small” team would be back in action Thursday. Hart described it as a “first step” in a “phased resumption of operations”, while Virgin Orbit is extending unpaid leave for the rest of the company of more than 750 people “until at least Monday”.

Hart said on Tuesday that the company “made some important progress” this week toward closing a financing deal.

Brown is the president of the Matthew Brown Companies family office in Dallas, and a general partner at Energent Energy, an asset manager focused on renewables and climate investments.

He’s been eyeing the space sector for years, particularly the rocket launch business, with multiple previous investments in SpaceX, Rocket Lab and Elon Musk’s Astra, according to PitchBook. His family’s office was established in 2008, and the “dry powder” per Pitchbook company is worth about $364 million.

The infusion of cash comes at a critical moment in Virgin Orbit’s rocket development.

The company has developed a system that uses a modified 747 to send satellites into space by dropping a rocket from under the plane’s wing mid-flight. But the company’s latest mission suffered a mid-flight failure as a problem during launch caused the rocket to miss orbit and crash into the ocean.

The company had been looking for fresh money for several months, with majority owner Sir Richard Branson unwilling to fund the company further. Branson, who dropped Virgin Orbit from Virgin Galactic in 2017, has 75% ownership in the company, while UAE sovereign wealth fund Mubadala has the second largest stake, at 18%.