Richard Branson’s satellite launch company, Virgin Orbit, has confirmed the company has filed for bankruptcy in the United States (US).
Virgin Orbit, which shed 85% of its workforce in March 2023, announced on April 3, 2023, that it commenced a voluntary proceeding under Chapter 11 of the US Bankruptcy Code.
According to Sky News Virgin Orbit is seeking sale of its assets, which are listed as $243m and a total debt at $153.5m as of September 30, 2022.
A Chapter 11 is a form of bankruptcy that involves the reorganization of a debtor’s business affairs. while keeping the company open and paying creditors gradually.
To help fund the process and protect its operations, Virgin Orbit has received a commitment from Virgin Investments for $31.6 million.
“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,” explained Dan Hart, CEO of Virgin Orbit.
Hart said the company had launched 33 satellites into space since it was formed in 2017 using innovative technology developed by its engineers.
“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,” Hart said. “At this stage, we believe that the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale.”
The company has been in financial jeopardy since the failed launch of a space rocket in Western Europe.
On January 10, 2023, the LauncherOne rocket was launched over the Atlantic Ocean from a specially modified Boeing 747-400 called Cosmic Girl.
While the launch at an altitude of just over 10 kilometers was successful, the rocket failed to reach its intended orbit, causing the loss of eight small satellites it was carrying onboard.
Virgin Orbit is a separate business to Branson’s other venture, Virgin Galactic, which plans to send tourists into space.
“Today my thoughts and concerns are with the many talented teammates and friends now finding their way forward who have been committed to the mission and promise of all that Virgin Orbit represents,” Hart added.