Virgin Orbit, Richard Branson’s satellite launcher, files for bankruptcy – 04/04/2023 – Market

Richard Branson’s Virgin Orbit Holdings filed for bankruptcy on Tuesday. The satellite launch company has been unable to secure the long-term funding needed to help it recover from a rocket failure in January.

The Long Beach, Calif.-based company filed suit in the United States Bankruptcy Court for the District of Delaware seeking the sale of its assets after announcing the layoffs of about 85% of its 750 employees last week.

“At this stage, we believe the Chapter 11 process represents the best way forward to identify and finalize an efficient, value-maximizing 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 via a blank check deal, raising $255 million in less time than expected. Spun off from Branson’s space tourism company Virgin Galactic in 2017, Virgin Orbit launches rockets via a Boeing 747 plane modified to put satellites into orbit.

The company’s sixth mission in January with its LauncherOne rocket, the first rocket launched outside Britain, failed to reach orbit and sent its payload of US and UK intelligence satellites 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 securities filings.

Virgin Orbit, approximately 75% owned by Virgin Group, struggled to find new funding after the January rocket failure, halting operations and laying off nearly all of its staff on March 15 to save money.

The March 30 announcement of around 675 layoffs came as a result of “the company’s inability to secure significant funding”, Virgin Orbit said. Those layoffs are expected to be substantially complete by Monday.

At the time, Virgin Orbit secured $10.7 million from Virgin Investments Limited of Branson to fund employee severance and other expenses linked to the layoffs, which it estimated would cost $15 million.

Virgin Investments will provide $31.6 million in new cash to Virgin Orbit through debtor-in-possession financing, Virgin Orbit said on Tuesday.

Virgin Orbit had a market value of $65 million based on Monday’s closing price, more than $3 billion below its value two years ago.