Launch company bankruptcy filings in the US • The Register

Space launch company Virgin Orbit has filed for bankruptcy just days after shutting down operations in the US and laying off most of its staff. The company has said it plans to continue trying to sell the business while it is under Chapter 11 protection.

The business confirmed this morning that Virgin Orbit Holdings and its US subsidiaries have voluntarily filed for Chapter 11 of the US Bankruptcy Code and plan to use approximately $31.6 million in financing provided by Virgin Investments Limited to continue their operations. , while they look for a buyer. for continuous operation.

The move follows Virign Orbit’s decision last week to cut its workforce by 85 percent after failing to raise enough equity capital to continue normal operations. Last-minute attempts to secure funding were still being made as of Friday.

Virgin Orbit was created as a spin-off from Virgin Galactic in 2017 to offer a satellite launch service using a LauncherOne rocket vehicle carried to high altitude and deployed from under the wing of a modified Boeing 747 named Cosmic Girl. This was intended to greatly reduce the cost of launching small satellites into space.

Its first launch attempt from UK soil met an inglorious end earlier this year when LauncherOne left Earth’s atmosphere but was unable to deliver its satellite payload into their desired orbit due to an unexpected anomaly. However, the company founded by billionaire Sir Richard Branson was already burning through cash before the failure, which appears to have turned into a major crisis for the business.

A February release from Virgin Orbit said investigators focused on a fuel filter in the LauncherOne vehicle’s fuel line that appeared to have moved out of its normal position at the start of the second stage’s first burn.

The fuel pump downstream of the filter was then operating at a low efficiency level, causing the Newton 4 engine to run out of fuel. This anomalous condition caused the engine to operate at higher temperatures than rated, causing nearby components to malfunction and prematurely terminate the second stage thrust.

Virgin Orbit CEO Dan Hart praised his team for launching a new and innovative method of launching satellites and noted that the company has completed several successful missions, including sending 33 satellites into orbit.

However, he admitted that: “While we have worked hard to resolve our financial situation and secure additional funding, we ultimately have to do what is best for the business.”

“We believe the cutting-edge startup technology this team has developed will have broad appeal to buyers as we continue the process of selling the company.” At this stage, we believe that the Chapter 11 process represents the best avenue for discovery. and complete an efficient and value-maximizing sale,” said Hart.

This is not the end for Virgin Orbit, as the company will continue to operate as a “debtor in possession” under the jurisdiction of the bankruptcy court and under the US Bankruptcy Code.

“Chapter 11 is not a liquidation process as you might think in other geographies. Nor is it equivalent to the UK administration’s proceedings,” said Rachel Chesley, senior managing director of strategic communications at FTI Consulting, which is acting as financial adviser to Virgin. Run around.

“It provides an opportunity for the company to operate as normal with its management team while it works to address the financial challenges. In the case of Virgin Orbit, that means continuing a rapid sales process that maximizes value,” Chesley said.

Virgin Orbit said it is now focused on quickly completing its sale process to provide clarity on the future of the business for customers, vendors and employees. ®

* Yes, we know that Liberty Global already “extracted” the former Branson-led business back in 2013, but like many of the businesses it sold, it kept the bearded brand as part of the deal.

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