Virgin Orbit filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code today after failing to secure long-term financing, Reuters reported. The company had announced in mid-March that it would temporarily suspend all operations in an effort to raise cash.
With the support of Virgin Investments Limited, the company will seek to use the process to maximise its assets and protect its operations.
Virgin Orbit files for bankruptcy
The aerospace company, owned by Richard Branson, filed for bankruptcy in the Bankruptcy Court for the District of Delaware with the goal of selling its assets. Dan Hart, CEO of Virgin Orbit, had previewed the decision at a meeting with some of the workforce last week and confirmed the dismissal of 675 employees, about 85% of the total.
Virgin Orbit had a market value of 65 million dollars at yesterday’s closing price, according to Reuters. Just two years ago, that figure was more than 3 billion. In its bankruptcy filing, the company said it has «between 200 and 999 estimated creditors».
The failed January mission
The company’s situation deteriorated markedly after its first failed attempt to launch satellites from the United Kingdom in January.
After successfully taking off and flying to the designated area, the Boeing 747 known as «Cosmic Girl» successfully released the orbital launch vehicle LauncherOne, which minutes later managed to leave the Earth’s atmosphere. However, it did not reach its intended orbit.
This was due to an anomaly that occurred sometime during engine ignition on the second stage of the launch, with the vehicle travelling at a speed of more than 11.000 miles per hour (more than 17.700 kilometres per hour). The failure caused the loss of nine American and British intelligence satellites and forced the premature suspension of the operation.
This situation caused the company’s value to plummet and added stress to Virgin Orbit’s already troubled financial situation. The company, which went public in December 2021, was not as successful as Virgin Galactic in raising funds to sustain its operations.
Virgin Orbit’s goal was to raise 483 million dollars, but it only raised 228 million in gross revenue from Boeing.
A pioneering company
Virgin Orbit was the first company to exploit the «airdrop» concept commercially. It emerged in 2017 to meet the growing demand for such launches from governments and private parties. Its system would allowed launches on short notice from any location.
However, the shift in demand towards larger launch rockets and the growth of other players in the sector meant increased competition for Virgin Orbit and changed the scenario in which it originally began operations.
