Virgin Orbit, the rocket company founded by British billionaire Sir Richard Branson, has filed for bankruptcy. The firm's latest effort to secure a new deal with a big investor fell through, leaving no choice but to seek a new buyer. Virgin Orbit's operations have already been put on hold for weeks.
Virgin Orbit Seeks Protection Through Filing for Chapter 11 Bankruptcy
As reported by BBC, the California-based firm filed for bankruptcy in the US. The company failed to secure new investments, which are supposed to keep the company's current projects rolling. With this, Virgin Orbit is now seeking to shield itself from its creditors by filing for Chapter 11 bankruptcy protection. Under this protection, the company will still be allowed to operate as it tries to recover financially.
"While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business," Virgin Orbit's top executive Dan Hart said.
Hart trusts that Virgin Orbit will attract potential buyers with vast resources to maximize the operations of the company, citing the "cutting-edge launch technology" that Virgin Orbit has introduced in the industry.
"At this stage, we believe the Chapter 11 process represents the best path forward to identify and finalise an efficient and value-maximising sale," Hart added.
Only about 100 employees are remaining in Virgin Orbit, according to The Guardian, as the company announced the layoff of 85 percent of its staff less than a week ago. The current workforce should serve under new management once the company succeeds in finding a new buyer.
Founded by Branson in 2017, Virgin Orbit was created as a "spin-off" to the British billionaire's space tourism firm Virgin Galactic. The latter caught the public's attention in 2021 as it paved the way for Branson to fly into the sub-orbit. He won over his rival, Amazon founder Jeff Bezos, in the silent race among billionaires to launch themselves into space, as Bezos was able to do so nine days after Branson.
Virgin Orbit modifies Boeing 747 air buses into rocket ships to send satellites into orbit. Following Virgin Galactic's success in late 2021, the company attracted multiple investors and its shares were listed on the Nasdaq stock exchange in New York.
Failed UK Rocket Launch Prevents Virgin Orbit From Getting New Funding
Virgin Orbit relies on a horizontal launch technology, straying from the usual vertical launch used by other rocket companies. Unfortunately, the firm lost investors' confidence when its satellite launch attempt in January failed.
The launch attempt was made in Spaceport Cornwall, which was supposed to be the first rocket launch on UK soil. The failure was caused by a displaced rocket fuel filter, leading to the overheating of the rocket's engines.
Since then, Virgin Orbit struggled to win new investors for its projects. With the lack of funding, the company decided to halt its operations in March to save its remaining resources. As of September last year, Virgin Orbit's total debts amount to $153.5 million (£123 million).
Virgin Investments, a sister company of Virgin Orbit, announced on Tuesday that it would supply $31.6 million to run the firm's operations as it searches for a new buyer.
