British billionaire Sir Richard Branson’s rocket company Virgin Orbit has filed for bankruptcy in the United States after failing to secure new investments.
The satellite launch company ceased operations a few weeks ago but hopes to find a buyer for the acquisition.
The California-based company announced last week that it would lay off 85% of its 750 employees.
Earlier this year, a Virgin Orbit rocket failed to complete its first-ever satellite launch from mainland Britain.
Virgin Orbit boss Dan Hart said the company had made a “huge effort” to clean up its finances and secure more money, but that it “ultimately does what’s best for the company.” I have to,” he said.
Virgin Orbit said it will now focus on finding a buyer for the acquisition “to provide clear information to customers, suppliers and employees about the future of the business.”
Founded in 2017, Virgin Orbit is a spin-off from Sir Richard’s space company Virgin Galactic.
Launched a rocket beneath a modified Boeing 747 aircraft to send a satellite into space.
But the first attempt to launch a satellite from Britain in January failed when the rocket’s fuel filter came off and overheated one of its engines.
Launched from Spaceport Cornwall near Newquay, the mission was billed as a milestone in British space exploration. From building satellites to building rockets to building new spaceports, it was expected to go a long way in making Britain a global player.
Virgin Orbit, which is largely owned by Virgin Group, sought new funding after shutting down operations last month to save money after a failed British rocket.
The company, which will list on New York’s Nasdaq index in 2021, had $153.5 million (£123 million) in debt as of September last year.
On Tuesday, the company announced that Virgin Investments, part of Virgin Group, will provide $31.6 million in new funding to help Virgin Orbit find a buyer. It has filed for Chapter 11 bankruptcy protection in the United States. This allows you to keep your business running and solve your financial problems while protecting from indebt creditors.
Spaceport Cornwall director Melissa Quinn said the news about Virgin Orbit was “very sad,” but said the site “remains focused on promoting the international space industry.”
She said it is the only licensed spaceport in the UK, has multiple users and works with other launch operators such as US company Sierra Space.
A good number of space companies have passed Chapter 11, have new owners a few months later, are debt free and have a healthy supply of investment capital to kickstart their business. Look no further than London-based OneWeb, which has just completed a broadband internet constellation in the sky. But who would step forward to buy a rocket deal? There are dozens, if not hundreds, of similar companies developing small rockets around the world.
If he can claim one of the key differentiators for Sir Richard Branson’s company, it should be responsiveness. That is, Jumbo can take off instantly from anywhere using his jet platform. This applies to the military, for example. However, the company found it very difficult to launch just twice last year. Therefore, any prospective new owner will want to know that a high rhythm launch can be achieved.
Hart said he is confident the company will have “great appeal” for new owners because his team has developed “state-of-the-art launch technology” despite financial difficulties.
But Danni Hewson, head of financial analysis at investment firm AJ Bell, said the company’s failed launch mission from the UK “wasn’t the best publicity” for its technology. “The collapse of Virgin Orbit is also not the best way to promote space investment issues,” she added. “The industry may have great potential at some point in the unknown future, but investors who try to reach for the star have just burned their fingers.”
The UK space agency said it had worked with Virgin Orbit “for many years” but said their problem was a “commercial deal” for the company. He added that the UK space sector is “thriving”, with revenues of £17.5bn a year. Sir Richard is one of a very small group of billionaires who have expanded their business empires by launching satellites and attempting to pioneer commercial space travel.
Others include online retailer Amazon founder Jeff Bezos, who founded the space company Blue Origin, and his Twitter and Tesla owner Elon Musk, who founded SpaceX.
Sir Richard and Virgin Group have invested more than $1 billion in the company to launch satellites via Virgin Orbit, but they are repurposed to allow tourists to make short trips into outer space. We are also working on the development of a possible “space plane”.
Virgin Galactic has started selling his $250,000 worth of tickets for these trips, with celebrities such as pop star Justin Bieber signing up.
But major players in the ‘billionaire space race’ have been criticised for providing pleasure rides for the ultra-wealthy at a time when countries around the world are grappling with climate change.
But Bezos insists his own space exploration is part of an environmental mission to “put all the heavy industries, all the polluting industries into space, and preserve Earth as the jewel of this beautiful planet.”