Virgin Orbit announced on Thursday that it would temporarily suspend all operations in an effort to raise cash while it seeks funding. The company is going through a difficult time that could lead to a declaration of insolvency. It would also lay off almost all of its staff.
See also: Virgin didn’t Orbit: first United Kingdom mission failed
Virgin Orbit would be close to bankruptcy
According to Forbes Argentina, the aerospace company owned by Richard Branson made the decision known in a filing with the Securities and Exchange Commission. The move came into effect the following day and will run for a week. In the meantime, Virgin Orbit would be in talks with various potential funding sources.
Sources familiarised with the issue quoted by Reuters said the measures would include laying off most of the employees.
According to CNBC, company officials held meetings throughout the weekend. A potential buyer would have opposed a sale price of around 200 million dollars. Contingency plans could be already being prepared for a possible bankruptcy filing, which could take place this week.
The failed January mission
The situation comes as Virgin Orbit is investigating the failed first 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 forced the premature suspension of the operation.
This 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 dollards, but 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 by governments and private parties.
For this, it uses a modified Boeing 747-400 to transport the LauncherOne vehicle to an altitude of approximately twelve thousand metres. From there, the vector is launched and begins its journey into outer space.
The aircraft, registered N744VG and named “Cosmic Girl”, is the only one of its kind in service in the world.
See also: Cosmic Girl will have a twin sister
