British billionaire Richard Branson’s satellite launch company Virgin Orbit has filed for bankruptcy after it failed to secure long-term funding required to recover from a rocket launch failure in January. The company said in its filing, with the US Bankruptcy court, that it is seeking a sale of assets after it announced layoffs of around 85 per cent of its 750-employee workforce last week, news agency Reuters reported.
Virgin Orbit CEO Dan Hart said the best path is to finalise an asset sale. He said in a statement, “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’s woes began after the rocket launch failure in January. The company’s sixth mission in January failed as its LauncherOne rocket, the first mission from Britain, failed to reach orbit and sent US and UK intelligence satellites plunging into the ocean. The company failed to secure funding after this incident.
Virgin Orbit was forced to halt its operations on March 15 and furlough nearly all its employees to conserve cash. The decision was taken as the company took an “operational pause” and also tried to seek funding to focus on rocket design improvement.
Texas-based venture capitalist Matthew Brown was reportedly in talks to invest $200 million in the company last month. These talks, however, derailed and Virgin Orbit was not able to secure any funding. The satellite launch company got $50 million from Branson’s Virgin Group between November and March via debt secured against equipment and other assets in case of bankruptcy. Moreover, Virgin Orbit went public in 2021 and raised $225 million less than anticipated.
(With agency inputs)
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