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British entrepreneur Richard Branson‘s Virgin Orbit Holdings Inc VORB raised $10.9 million from Virgin Investments Limited via the issue of a senior secured convertible note to pay severance for laid-off employees.
What Happened: Virgin Orbit raised $10.9 million from Branson’s investment arm via the issue of a senior secured convertible note, the company said in an SEC filing. The proceeds would be used to pay severance to the 675 employees laid off on Thursday.
The company laid off 85% of its workforce to cut expenses after it failed to procure funding. Virgin Orbit estimates the workforce reduction to incur aggregate charges of about $15 million of which $8.8 million will be severance payments and employee benefit costs. A majority of these charges will be incurred in the first quarter of 2023, the company added.
The workforce reduction will be substantially complete by April 3.
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Virgin Orbit halted all its operations starting March 16 and furloughed nearly all of its 750 employees to look out for potential funding. Though the company was nearing a $200 million investment from Texas-based venture capital investor Matthew Brown, deal talks fell through.
Virgin Orbit CEO Dan Hart told employees that the company is ceasing operations for the foreseeable future on Thursday, reported CNBC.
Since listing on the Nasdaq in May 2021, Virgin Orbit shares fell 96.5% until the last close.
Price Action: Virgin Orbit shares fell 44.8% in extended trading after closing at $0.3401 on Thursday, according to data from Benzinga Pro.
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Image and article originally from www.benzinga.com. Read the original article here.