The Virgin Orbit building is seen after the company paused operations last week, in Long Beach, California, US, March 22, 2023. | Image Credit: Reuters
Richard Branson’s Virgin Orbit Holdings filed for Chapter 11 bankruptcy on Tuesday after the satellite launch company failed to secure the long-term financing needed to help it recover from January’s rocket failure.
The Long Beach, California-based company filed a filing in US Bankruptcy Court for the District of Delaware seeking to sell its assets after announcing the layoff of about 85% of its 750 employees last week.
“At this stage, we believe the Chapter 11 process represents the best path to identify and finalize an efficient and value-enhancing sale,” Virgin Orbit CEO Dan Hart said in a statement.
The company listed assets of about $243 million and its total debt at $153.5 million as of Sept. 30 in the filing.
Virgin Orbit went public in 2021 in a blank-check deal, raising $255 million less than expected. Spinned off from Branson’s space tourism company Virgin Galactic in 2017, Virgin Orbit launches rockets from the bottom of modified Boeing 747 planes to send satellites into orbit.
The company’s sixth mission in January with its centerpiece LauncherOne rocket, the first rocket launch from Britain, failed to reach orbit and sent its payload of US and UK intelligence satellites plunging into the ocean.
Between November and March, Branson’s Virgin Group provided $50 million to the satellite launch company through debt secured against its equipment and other assets in the event of bankruptcy, according to filings by securities.
Virgin Orbit, about 75% owned by Virgin Group, has been scrambling to find new funding after the rocket failed in January, halting operations and laying off almost all of its employees on March 15 to save money .
Reuters reported last month that Texas-based Matthew Brown was in talks to invest $200 million in the company. Those talks broke down, the sources said Reuters last week.
The March 30 announcement of about 675 layoffs came as a result of the company’s “inability to secure significant financing,” Virgin Orbit said. Those layoffs are expected to be largely complete by Monday.
Virgin Orbit at the time received $10.7 million from Branson’s Virgin Investments Limited to fund severance for employees and other costs related to the layoffs, which it estimated would cost $15 million.
Virgin Investments will provide $31.6 million in new money to Virgin Orbit through debtor-in-possession financing, Virgin Orbit said Tuesday.
Virgin Orbit has a market value of $65 million based on Monday’s closing price, down from more than $3 billion two years ago.
