Spaceport Virgin Orbit Cosmic Girl

Virgin Orbit files for bankruptcy

Image credit: Spaceport Cornwall

Sir Richard Branson’s satellite launch company Virgin Orbit has filed for Chapter 11 bankruptcy in the US after failing to secure rescue funding.

The California-based company lodged a filing with the US Bankruptcy Court for the District of Delaware as it seeks a sale of the remaining business.

The chapter under which it filed – Chapter 11 – generally allows for the reorganisation of a struggling company, aimed at keeping the business alive and paying creditors over time.

Virgin Orbit has been facing financial difficulties since its rocket failed to complete the first satellite launch from UK soil in January. Last week, the company fired 85 per cent of its workforce and paused all its operations

“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," Dan Hart, Virgin Orbit's chief executive, said while announcing the news. 

“We believe that the cutting-edge launch technology that this team has created will have wide appeal to buyers as we continue in the process to sell the company. At this stage, we believe that the Chapter 11 process represents the best path forward to identify and finalise an efficient and value-maximising sale.”

Virgin Orbit was founded in 2017 and is a spin-off of Sir Richard's space tourism company Virgin Galactic. The company's model focuses on launching rockets from beneath modified Boeing 747 planes to send satellites into space.

In December, Virgin Orbit was awarded a licence by the Civil Aviation Authority to operate the UK’s first space launch from Spaceport Cornwall at Cornwall Airport Newquay. The Start Me Up mission had been hailed as “historic”, and was set to open the door for satellite launches in the UK.

The rocket was successfully released from the aircraft and its engines ignited, taking it into space at a speed of more than 11,000mph (around 18,000km/h). However, a dislodged fuel filter caused the mission to end prematurely

In the past few weeks, Branson’s Virgin Investments business has injected around $43m (£35m) into Virgin Orbit to support recent operations and finance severance packages.

The company listed assets of about $243m (£195m) and its total debt at $153.5m (£123m) as of 30 September. Between November and March, Virgin Group provided $50m (£40m) to the satellite launch company through debt secured against its equipment and other assets, according to securities filings.

In total, Branson and his Virgin Group have invested more than $1bn (£809m) into the business. 

Since the failure of Virgin Orbit's mission, satellite industry representatives have told MPs that “seismic change” would be needed to boost the appeal of future launches from British soil. 

Melissa Quinn, head of Spaceport Cornwall, said the news about Virgin Orbit was "very sad" but said the site would will "remain focused on furthering the international space industry", adding that the spaceport is working with other launch operators such as US-based Sierra Space.

Virgin Orbit had a market value of $65m (£52.4m) based on Monday's closing price, down from more than $3bn (£2.4bn) two years ago.

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