Following a failed flight this year and increasing difficulty in securing finance for upcoming missions, Richard Branson’s Virgin Orbit has decided to seek Chapter 11 bankruptcy protection.
In a filing made on Monday, the company informed the U.S. Bankruptcy Court for the District of Delaware that it was trying to sell its assets after terminating the majority of its employees on Friday.
According to Virgin Orbit, Branson’s Virgin Investments Ltd. has provided $31.6 million in debtor-in-possession financing for the company.
When the bankruptcy court approves the finance, according to Virgin Orbit CEO Dan Hart, the money should give Virgin Orbit the operating capital it needs to carry on as it looks to sell the business.
Even though we have made significant efforts to improve our financial situation and find extra funding, Hart insisted that ultimately, the company must come first.
The Long Beach, California-based business stated in its bankruptcy petition that it anticipates having between 200 and 999 creditors. As of September 30, according to a regulatory filing, it had around $243 million in total assets and $153.5 million in total liabilities.
Virgin Orbit announced last week that it was eliminating 675 employees or 85% of its workforce. Prior to the news, the business declared that all operations will be put on hold due to rumors of potential job cutbacks. Virgin Orbit announced at the moment that it was halting all development, but it didn’t specify how long.
Virgin Orbit attempted to send the first satellites into orbit from Europe in January, but the project failed when a rocket’s upper stage abruptly shut down. In the United Kingdom, where it was thought that the launch from Cornwall in southwest England would usher in greater business opportunities for the country’s space industry, it was a failure.
The company announced in February that an examination had revealed that the fuel filter on one of its rockets had come loose, leading to an engine overheating and other malfunctions over the Atlantic Ocean.
The Nasdaq-listed Virgin Orbit was established in 2017 by British billionaire Branson to serve the market for launching tiny satellites into orbit. Instead of using fixed launch sites, the company’s LauncherOne rockets are launched from modified Virgin passenger flights, giving it more operational flexibility.
Before to Tuesday’s opening bell, shares of Virgin Orbit Holdings Inc., which had traded above $10, fell 24% to approximately 15 cents.
