Astra Space explores options to raise funds, including selling a majority stake in its in-space propulsion business or other parts of the company.
Astra Space, the California-based aerospace company, is facing financial challenges and is actively seeking ways to avoid bankruptcy. Reports have emerged that the company is considering selling a 51% stake in its in-space propulsion business or other parts of its operations to raise much-needed funds. Astra’s valuation has plummeted from $2.1 billion to $24 million since its announcement to go public with a blank-check firm two years ago. The potential sale of its propulsion business or other assets could provide a lifeline for the struggling company.
Astra Space’s Desperate Measures to Stay Afloat
Astra Space is currently evaluating various options to secure financing and sustain its operations. One potential avenue is the sale of a majority stake in its in-space propulsion business. The company aims to value this business at over $100 million. Additionally, Astra is considering selling parts of its rocket factory, equipment, or other components of its propulsion business to generate the necessary cash flow.
The decision to explore these options is not surprising, as Astra had previously announced the creation of a subsidiary for its spacecraft propulsion business. This move was intended to provide the company with more flexibility in securing financing.
Astra’s Struggle for Survival
Astra Space has been grappling with financial difficulties for several months. At the end of the second quarter of this year, the company reported having only $26.3 million in cash and cash equivalents. With a market capitalization of just $24 million, Astra’s financial situation has significantly deteriorated since its initial valuation.
The acquisition of Apollo Fusion in 2021 was seen as a strategic move to expand Astra’s space services and integrate them with its rocket development. However, the acquisition faced numerous challenges and internal dysfunction, leading to the departure of most of the original Apollo Fusion team.
Astra Space’s search for ways to avoid bankruptcy has led the company to consider selling a majority stake in its in-space propulsion business or other assets. With a dwindling cash reserve and a significantly reduced market valuation, Astra is in urgent need of financial support. The potential sale of its propulsion business or other components could provide the necessary funds to sustain the company’s operations. As Astra continues to navigate these challenging times, the outcome will determine its future in the highly competitive aerospace industry.