After failing to find long-term funding to recover from a January rocket mishap, Richard Branson’s Virgin Orbit Holdings (VORB.O) filed for Chapter 11 bankruptcy on Tuesday.
After laying off 85% of its 750 workers last week, the Long Beach, California-based firm filed in the U.S. Bankruptcy Court for the District of Delaware to sell its assets.
“We think that the Chapter 11 procedure is the best road ahead to find and conclude an efficient and value-maximizing transaction,” Virgin Orbit CEO Dan Hart stated.
The statement showed $243 million in assets and $153.5 million in debt as of September 30.
Virgin Orbit’s 2021 blank-check IPO raised $255 million less than planned. Virgin Orbit, a 2017 spinoff from Branson’s space travel company Virgin Galactic, launches satellites from a modified Boeing (BA.N) 747.
The company’s sixth flight in January with its LauncherOne rocket, Britain’s first rocket launch, failed to reach orbit and dropped its cargo of U.S. and U.K. espionage satellites into the water.
Securities papers show that Branson’s Virgin Group loaned $50 million to the satellite launch firm between November and March.
Virgin Orbit, 75% owned by Virgin Group, halted operations and furloughed virtually all its staff on March 15 to preserve funds after the January rocket mishap.
Reuters reported that Texas-based Matthew Brown discussed investing $200 million in the firm last month. However, sources told Reuters last week that such conversations failed.
“The company’s failure to acquire sufficient finance” led Virgin Orbit to announce 675 layoffs on March 30. Monday should see most of those layoffs.
Virgin Orbit received $10.7 million from Branson’s Virgin Investments Limited to cover employee severance and other layoff costs, estimated at $15 million.
Tuesday, Virgin Orbit announced debtor-in-possession financing from Virgin Investments for $31.6 million.
Virgin Orbit was worth $65 million on Monday, down from $3 billion two years earlier.
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