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, Kemp and London said they anticipated raising $45 million overall to take Astra private, of which $7.7 million would go to shareholders. The remainder would cover transaction fees, insurance and at least $20 million of cash for company operations after the deal closes. In November, Kemp and London estimated needing to raise $60 million to $65 million at the higher share price.

“We have arranged equity and rollover commitments for the amounts necessary to consummate the transaction,” they wrote, adding that unnamed customers were willing to provide $8.6 million “to support future orders.”

Astra has disclosed few details about its financial status since the original offer. The company canceled plans for a quarterly earnings call immediately after the publication of the offer, but reported a net loss of $29.7 million in the third quarter. The company has since reported a few minor funding deals, including a Jan. 19 agreement that generated net proceeds of $5.85 million.

While the original proposal offered a 100% premium on the price Astra shares were trading at the time, the new proposal of $0.50 a share is far less than the $1.76 as of the end of trading Feb. 26. The proposal, though, had little effect on Astra shares, which closed down less than 1% Feb. 27.

Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. He earned a Ph.D. in planetary sciences from the Massachusetts Institute of Technology and a bachelor’s degree with honors in geophysics and planetary science...