Sir Richard Branson’s Virgin Orbit has collapsed 15 months after the rocket launch company went public with a valuation of $3.7bn.
The group, which debuted on Nasdaq in December 2021 after merging with a so-called blank cheque company, filed for Chapter 11 bankruptcy protection in the US state of Delaware on Tuesday morning.
Weeks of crisis talks with potential investors had failed to secure new funding for Virgin Orbit, which has been burning close to $50mn a quarter in its race to snare a share of the rapidly growing launch market.
Last week, some 85 per cent of the group’s staff were laid off as chief executive Dan Hart admitted that the business had “ceased operations for the foreseeable future”.
Virgin Orbit shares have tumbled since the beginning of the year, from $1.79 to close at $0.19 in New York on Monday, valuing the company at just $65mn.
Now the process of finding a buyer for its horizontal satellite launch system, based on a converted 747 superjumbo aircraft, will continue under the protection of the court. If none is found the business will be wound down.
Virgin Orbit said in a statement it would receive $31.6mn in debtor-in-possession financing from Branson’s Virgin Investments to provide it with the necessary liquidity to continue operating as it tried to sell the company.
“The Chapter 11 process represents the best path forward to identify and finalise an efficient and value-maximising sale,” said Hart.
“We believe that the cutting-edge launch technology that this team has created will have wide appeal to buyers.”
The filing comes after a five-year effort to tap into the space launch market. Orbit was spun off in 2017 from Branson’s space tourism business Virgin Galactic and brought in other investors including Boeing and the Emirati sovereign wealth fund Mubadala.
Investors had been enticed by predictions of a multibillion-dollar opportunity in space launch. Euroconsult, the space data analysts, expect some 1,700 satellites to be launched every year to 2030, with growth particularly strong in smaller satellites flying in low earth orbit. This region of space is increasingly key to communications, earth observation and security.
