Virgin Orbit has filed for Chapter 11 bankruptcy, the company has said. The company, which puts satellites into orbit, failed to receive funding and can’t afford to continue operations. The decision to file for bankruptcy comes just days after it laid off 85% of its total workforce or 675 employees.
Discussing the decision, Dan Hart, CEO of Virgin Orbit, said:
“The team at Virgin Orbit has developed and brought into operation a new and innovative method of launching satellites into orbit, introducing new technology and managing great challenges and great risks along the way as we proved the system and performed several successful space flights – including successfully launching 33 satellites into their precise orbit. While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business. We believe that the cutting-edge launch technology that 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 that the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale”
To help the company through the bankruptcy process, Virgin Investments Limited has supplied it with $31.6 million in debtor-in-possession financing. This still needs to be approved by the Bankruptcy Court but it will give Virgin Obit liquidity as it seeks to sell the company and its assets. Virgin Orbit said it’s “focused on a swift conclusion” to its sale process.
It’s important to point out that Virgin Orbit is not the same as Virgin Galactic. Virgin Galactic is the company that flies tourists to the edge of space to experience micro-gravity before heading back to Earth. With rising interest rates, other unprofitable rocketry companies could also collapse.