Virgin Orbit Stops Operations After Bankruptcy Sales
Richard Branson’s Virgin Orbit Holdings, which had filed for Chapter 11 bankruptcy protection, said it will sell its assets to four winning bidders following an auction and will cease operations.
Rocket Lab USA, Inc., a launch and space systems company, said it has agreed to buy certain Long Beach California aerospace production and manufacturing assets from Virgin Orbit. The successful bid of around $16.1 million includes the assumption of the lease to Virgin Orbit’s headquarters and manufacturing complex, and certain production assets, machinery, and equipment located there.
The bid excludes the purchase of Virgin Orbit’s Boeing 747 aircraft, launch vehicles or mobile launch assets for its rockets, or other Virgin Orbit facilities, inventory and assets.
The space launch provider’s issues started with a rocket failure in January that added to its severe financial struggles following losses for many quarters. The company filed for bankruptcy in early April after failing to find required funding to keep up its operations.
In a statement, Virgin Orbit announced the completion of a comprehensive sale process and competitive auction conducted under the United States Bankruptcy Code.
The transactions are subject to approval by the Court and certain other customary closing conditions. A hearing to seek Court approval is scheduled for Wednesday with the transactions expected to close shortly thereafter.
The company said in its statement, “As Virgin Orbit embarks on this path, the management and employees would like to extend their heartfelt gratitude to all stakeholders… It is through their collective efforts that the Company has been able to achieve significant milestones and make lasting contributions to the advancement of satellite launch in the United States and the United Kingdom.”
Virgin Orbit, founded by Branson in 2017, began commercial service in 2021, and had already delivered commercial, civil, national security, and international satellites into orbit. Virgin Orbit’s LauncherOne rockets were designed and manufactured in Long Beach, California. The rockets were air-launched from a modified 747-400 carrier aircraft that allowed the firm to operate from locations all over the world.
The company, which had successfully launched 33 satellites into their precise orbit, on January 9 suffered a mid-flight failure with its Start Me Up mission, and the rocket crashed into the ocean without reaching the orbit.
The flight conducted by Virgin Orbit’s air-launched LauncherOne system from UK was the first orbital launch attempt in history conducted from western Europe.
Following this, Virgin Orbit sought a funding lifeline to move forward, but due to its absence, it had paused all its operations in mid March and also planned to furlough nearly all of its employees.
Virgin Orbit also reduced its workforce due to the inability to raise sufficient out-of-court capital to continue operating its business.
On April 4, Virgin Orbit and its U.S. subsidiaries commenced a voluntary proceeding under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in the District of Delaware in order to effectuate a sale of the business.
In the interim, Virgin Orbit continued operating in the ordinary course as a “debtor-in-possession” under the jurisdiction of the bankruptcy court.
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