Virgin Orbit Files for Chapter 11 Bankruptcy Protection, Seeks Buyer for Assets

Virgin Orbit, the satellite launch company based in California, has filed for Chapter 11 bankruptcy protection in the U.S. The company, which was founded in 2017 as a spin-off from Virgin Galactic, is seeking to sell its assets after it failed to secure long-term funding to recover from a January rocket failure. The company had announced last week that it would lay off nearly 85% of its 750-strong workforce. CEO Dan Hart said that the Chapter 11 process was the best path forward to identify and finalize an efficient and value-maximizing sale.

Virgin Orbit air-launches rockets from beneath a modified Boeing 747 plane to send satellites into orbit. Its strategy was to launch small rockets from a 747 in flight, allowing for short-notice launches from anywhere. But a shift in demand towards larger launch rockets and more cost-effective shared rides to space on SpaceX's Falcon 9 rocket increased the competitive stakes for Virgin Orbit. The company was valued at $3 billion two years ago, but its market value has now fallen to $65 million.

The company has received a commitment from Virgin Investments for $31.6 million in new money through debtor-in-possession financing. Virgin Group, which owns roughly 75% of the launch company, has invested over $1 billion in the unit, including $60 million in secured loans since November. Abu Dhabi's sovereign wealth fund, Mubadala, holds the second-largest stake at 17.9%.

Despite the challenges faced by Virgin Orbit, CEO Dan Hart remains confident in the company's cutting-edge launch technology and its wide appeal to potential buyers. He said, "I am confident of what we have built and hopeful to achieve a transaction that positions our company and our technology for future opportunities and missions."

The satellite launch industry has faced criticism for offering joy rides for the super-wealthy while countries across the globe are being impacted by climate change. However, the industry has significant potential in the unknown future and is attracting investment from billionaires such as Jeff Bezos and Elon Musk. Sir Richard Branson and Virgin Group have invested more than $1 billion in the business to launch satellites through Virgin Orbit and to develop reusable "space planes" to take tourists on brief trips to sub-orbital space.