The company has modified 747 “Cosmic Girl” aircraft in Mojave, California.
Virgin Orbit on Tuesday filed for Chapter 11 bankruptcy protection in the United States after failing to secure a financing lifeline.
The California-based satellite launch company has filed the lawsuit with US bankruptcy court in the District of Delaware and is looking to sell its assets.
It comes after CNBC obtained an audio recording of Virgin Orbit CEO Dan Hart telling employees during a comprehensive meeting last week that the company has ceased operations “for the foreseeable future.” The company also said it would lay off nearly all of its workforce.
“While we have made significant efforts to address our financial situation and secure additional financing, we must ultimately do what is best for business,” Hart said in a statement on Tuesday.
“We believe the cutting-edge launch technology this team has created will have broad appeal to buyers as we continue the process of selling the company. At this point, we believe the Chapter 11 process represents the best path forward for identifying and finalizing an effective sales process and maximizing value.”
Virgin Orbit said it is focused on a quick conclusion to the sale process to clarify the company’s future.
Virgin Orbit said a pledge from Virgin Investments allowed the company to secure $31.6 million in new funds through “debt in possession” financing. This process, sometimes known as DIP financing, refers to financing companies that have filed for Chapter 11 bankruptcy protection to allow them to continue operating.
Virgin Orbit has developed a system that uses a modified 747 to send satellites into space by dropping a rocket from under the plane’s wing mid-flight.
The company’s last mission suffered a mid-flight failure, with a problem during launch preventing the rocket from reaching orbit. I crashed into the ocean.
Virgin Orbit is among the few US rocket companies that have successfully reached orbit using a specially developed launch vehicle. It has launched six missions since 2020, with a tally of four successes and two failures.
It had been looking for new money for several months, with majority owner Richard Branson unwilling to fund the company further.
Branson founded the company in 2017 and owns 75% of the shares. Abu Dhabi’s sovereign wealth fund Mubadala holds the second largest stake, at 18%.
The company started trading services in 2021 and started public trading on the Nasdaq Stock Exchange after the so-called SPAC merger. The deal saw the company valued at about $4 billion at the time.
It’s a markedly different picture nowadays. Virgin Orbit’s market capitalization was about $65 million, according to Monday’s closing price.
“Today my thoughts and concerns are with the many talented colleagues and friends who are now finding their way forward and who have been committed to the mission and promise of all that Virgin Orbit stands for,” said CEO Dan Hart.
“I am confident in what we have built and hope to achieve a deal that positions our company and our technology for future opportunities and missions,” he added.
CNBC channel Michael Sheetz Contribute to this report.