Virgin Orbit files for Chapter 11
April 4, 2023
By Chris Forrester
Struggling satellite launch company Virgin Orbit, backed by entrepreneur Sir Richard Branson, has filed for Chapter 11 bankruptcy in the US.
The move to a Chapter 11 bankruptcy allows the affected company to stay active, although under a Court’s administration, while it – hopefully – secures fresh funding and permits a reconstruction of the business.
However, existing shareholders will inevitably be squeezed out in favour of those primary bond and debt holders. In its filing, Virgin Orbit lists its assets and values the liabilities at between $100 million and $500 million.
The company, based in California, announced that it would cut 85 per cent of its 750-strong workforce. Earlier in 2023, a Virgin Orbit rocket failed to complete its first-ever satellite launch from UK soil from Spaceport Cornwall, at Newquay.
Virgin Orbit’s CEO Dan Hart said that although Virgin Orbit had “taken great efforts” to address its finances and secure more funding, “we ultimately must do what is best for the business.”
He added that Virgin Orbit will now concentrate on finding a buyer for the business “to provide clarity on the future of the company to its customers, vendors, and employees”.
“We believe the cutting-edge launch technology 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 the Chapter 11 process represents the best path forward to identify and finalise an efficient and value-maximising sale,” Hart added.
Read Nick Snow’s Virgin Rocket Fizzles Out blog.