Virgin Orbit files for bankruptcy and seeks a buyer

WASHINGTON, April 4 (Reuters) – Virgin Orbit Holdings, British businessman Richard Branson’s satellite launch company, filed for Chapter 11 protection under U.S. bankruptcy law on Tuesday.

The company failed to secure the long-term funding needed to help it recover from the failure of its LauncherOne rocket last January.

Based in Long Beach, Calif., the company filed a petition in the District of Delaware Bankruptcy Court seeking the sale of its assets.

On March 30, it had already announced the dismissal of around 85% of its 750 employees due to “the company’s inability to obtain significant financing”. These layoffs are expected to be substantially complete by Monday.

“At this point, we believe the Chapter 11 process represents the best path forward to identify and complete an effective, value-maximizing sale,” Dan Hart, CEO of Virgin Orbit, said in a statement.

Virgin Orbit’s strategy was to launch small rockets from an airborne 747 to enable short-range launches from any location. But shifting demand for larger launch rockets and more cost-effective shared flights to space aboard SpaceX’s Falcon 9 rocket over the past two years has raised the competitive stakes for Virgin Orbit, according to sources. analysts and industry experts.

Virgin Investments, a unit of Virgin Group, will provide $31.6 million (28.97 million euros) in new money to Virgin Orbit to fund its operations while it searches for a buyer, the companies said.

Virgin Orbit had a market value of $65 million at Monday’s closing price, up from passing $3 billion two years ago.

(Reporting Joey Roulette in Washington, Jahnavi Nidumolu in Bangalore and Kevin Krolicki in Singapore; French version Gaëlle Sheehan, editing by Kate Entringer)

©2023 Thomson Reuters, all rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. “Reuters” and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.

Source link -87