Virgin Orbit files for bankruptcy following job cuts, halted operations

Richard Branson’s troubled space-launch firm Virgin Orbit Holdings Inc (NASDAQ:VORB) has collapsed, filing for Chapter 11 bankruptcy in a court in the U.S. state of Delaware on Tuesday morning.

“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,” Chief Executive Dan Hart said in a statement.

The California-based company listed assets of about $243 million and its total debt at $153.5 million as of September 30 in the filing, Reuters reported. Virgin Orbit added that it will look to achieve a “swift conclusion” to its ongoing hunt for a potential buyer. 

Spun off of Branson’s space tourism venture Virgin Galactic (NYSE:SPCE) in 2017 to develop rockets to carry small satellites into space, Virgin Orbit has been struggling to secure funding after it reportedly told its employees last month that it had halted its operations indefinitely. 

Virgin Orbit also said in a filing with the U.S. Securities and Exchange Commission that it would lay off 85% of its about 750 staff following a failure to secure “meaningful funding.” Total costs related to the dismissals were estimated to be approximately $15M. Branson’s investment arm injected $10.9M into the group via a senior secured convertible note, which Virgin Orbit said would be enough to pay out severance to the roughly 675 workers who will lose their jobs.

On Tuesday, Virgin Orbit said the investment vehicle will plug a further $31.6M in new money through so-called debtor-in-possession financing, which allows a business to raise capital while it is in bankruptcy proceedings in court. 

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