Virgin Orbit was founded by Sir Richard Branson in 2017 and is a part of the Virgin Group.
The satellite launch company Virgin Orbit, founded by billionaire Richard Branson, filed for Chapter 11 bankruptcy on Tuesday. The move comes after the company struggled to raise long-term funding in January and follows its announcement to lay off 90% of its workforce in March.
“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. 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. 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,” Virgin Orbit chief executive officer Dan Hart said.
The company has received a debtor-in-possession, or DIP, financing commitment worth $31.6 million from Virgin Investments Limited. Upon approval from the Bankruptcy Court, the DIP financing is expected to provide Virgin Orbit the liquidity to continue operating for further activities like the swifter conclusion of the sale of the company along with payment of remaining employee wages and benefits without interruption. Additionally, the company said it intends to fully pay suppliers and vendors.
It is noteworthy that the company faced a major setback in January this year after its launch system LauncherOne failed to reach orbit. The mishap led to the company struggling for new funding and it was forced to halt its operations to conserve cash.
In March, Virgin Orbit announced to cease its operations for “the foreseeable future,” leaving 675 employees, or 90% of its workforce, without jobs. Severance packages, including a cash payment, continued benefits, and job referrals to Virgin Galactic’s hiring department, were announced to be given to impacted employees. The company’s top executives were said to receive “golden parachute” severances approved by the company’s board.
Virgin Orbit, a company founded by Sir Richard Branson in 2017 and a part of the Virgin Group, focuses on providing launch services for small satellites using air-launched rockets. Virgin Orbit successfully completed its first orbital launch on January 17, 2021, placing ten small satellites into orbit for NASA’s Educational Launch of Nanosatellites program.
