WASHINGTON: Virgin Orbit Holdings, which was founded by billionaire tycoon Richard Branson, on Tuesday filed for Chapter 11 bankruptcy protection after the satellite-launching enterprise struggled to secure long-term funding after a failed launch in January.
The filing comes less than 2 years after Virgin Orbit went public. At that time, its valuation was at around $3 billion. But the January disaster left the company unable to secure fresh funds and was forced to stop operations.
Bankruptcy filing aims to final value-maximizing sale
Virgin Orbit Chief Executive Dan Hart said that the Chapter 11 process seems to be the best possible way forward to ascertain and finalize a value-maximizing and efficient sale.
The company, which was a spin-off from Branson’s space tourism firm Virgin Galactic, sends satellites into orbit with the help of rockets that are launched from a Boeing 747 plane that has been modified.
The California-based company, as per the filing, sought a sale of its assets in a court in Delaware just days after laying off around 85% of its 750 workers.
Virgin Orbit listed a total debt of $153.5 million and assets of around $243 million as of September 30. The company had gone public in December 2021 with the help of a blank-check merger and raised $255 million less than what had been expected.
At the close of trading on Monday, the valuation of the company was $65 million. On Tuesday, its shares ended up losing 23% to close at just 15 cents each.
The company’s 6th mission in January using its main LauncherOne rocket, which was the company’s first rocket launch out of the United Kingdom, was unable to reach orbit and ended up plunging the commercial and defense-related research satellites onboard into the ocean.
The disaster involving Britain’s Cornwall Spaceport made the company stop operations and furlough nearly all of its employees in March to conserve funds.
