As per a securities filing on Thursday, the founders of Astra, a failing space company, have proposed to take the company private at a valuation of approximately $30 million.
The chief technology officer, Adam London, and chairman and CEO Chris Kemp presented a proposal to the Astra board of directors on Wednesday to purchase all of the outstanding shares of the firm at a price of $1.50 per share.
That amount reflects a 103% premium over the closing price on Wednesday of 74 cents per share, or almost $16 million in market value.
“We think that Astra will benefit most from being a private firm in terms of its strategic goals and business opportunities. In a letter to the board, Kemp and London stated that “taking the company private while delivering a meaningful premium to current shareholders allows for the best interests of shareholders as well as the Company, its employees, and its customers to be met.”
The take-private plan will require $60 million to $65 million in funding, depending on the purchase price, transaction costs, and bridge financing, according to the founders. “Open to certain accredited investor stockholders of the Company rolling their equity into the transaction” is another statement made by Kemp and London.
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Astra’s rocket launch operations have been suspended following a mission failure in June 2022. With its acquired spacecraft propulsion business unable to generate significant quarterly revenue, the company is rapidly running out of cash. In an effort to concentrate on producing spacecraft engines rather than rocket development, Astra laid off 25% of its employees in early August.
Astra said on Friday that its cash reserve fell below $10.5 million last month and that it missed a debt raising. The business then raised money from two investors on Monday to settle that outstanding debt.
In February 2021, Astra went public through a SPAC merger, valued at $2.6 billion. The startup wanted to build tiny rockets quickly and affordably. Even though Astra was able to successfully enter orbit twice, the business experienced three launch failures after going public.