Virgin Orbit has filed for Chapter 11 bankruptcy protection in the U.S. less than a week after laying off most of its staff.
In an April 3 filing, Virgin Orbit said it decided to begin Chapter 11 proceedings “in order to effectuate a sale.”
Ater failing to secure additional financing, “we ultimately must do what is best for the business,” Virgin Orbit CEO Dan Hart said in a statement.
“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,” he continued. “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.”
To help fund the process and protect its operations, Virgin Orbit has received a commitment from billionaire founder Richard Branson’s Virgin Investments Limited for $31.6 million in debtor-in-possession (DIP) financing, Virgin Orbit said. Once approved by the bankruptcy court, the DIP financing should provide Virgin Orbit with the necessary liquidity to continue operating as it tries to find a buyer.
The space launch company said March 30 it would be laying off around 85% of its staff by April 3. That came after the March 16 suspension of its operations and furloughing of almost all staff as it sought new funding.
On March 21, the company said it planned an “incremental” resumption of operations on March 23 to work on preparations for its next mission. News reports at the time stated that Virgin had been in talks with a Texas-based venture capitalist for about $200 million in funding but the talks broke down.
Virgin Orbit was founded by Branson in 2017. Although the first launch of LauncherOne, in May 2020, failed to reach orbit, the vehicle went on to place 33 satellites into orbit over 2021-22. The company had been expanding production of LauncherOne vehicles at its facility in Long Beach, California. Its first attempted flight from the UK failed on Jan. 9.
