WASHINGTON — The founders of satellite propulsion and launch vehicle company Astra have sharply cut their offer to take the company private, warning of “imminent bankruptcy” if the company doesn’t accept their new proposal.
In a U.S. Securities and Exchange Commission filing Feb. 27, Astra released a letter sent three days earlier to a special committee of the company’s board of directors by Chris Kemp and Adam London, the chief executive and chief technology officer, respectively, of the company, slashing by two-thirds their offer to buy outstanding shares of the publicly traded company.
In November, Kemp and London proposed to buy Astra shares at $1.50, approximately double their price at the time they announced the deal. In the new proposal, they are offering only $0.50 per share.
Kemp and London cited several reasons for cutting the share price. They included continued cash burn by the company since they tendered the original offer and higher “non-operating expenses” as the company used multiple third-party advisers to assess options. They also said the special committee, as well as customers and investors, sought a plan that ensured a sufficient cash balance to support company operations once the deal closed.
Another issue, they wrote, is “the urgent need for the Company to identify a sustainable solution satisfactory to the Special Committee as an alternative to imminent bankruptcy, transposed with the amount of investor capital that we have identified to date in support of this transaction.”
They argued that, as shareholders, they would also be adversely affected by their proposed deal. “That said, we believe that taking the Company private and delivering some equity value to shareholders is a superior alternative to taking the Company through a liquidation or reorganization process that would likely impair the Company commercially and result in zero proceeds to shareholders.”
Under the revised proposal,…
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