Alvarez & Marsal and Ducera are helping Virgin Group’s commercial space satellite firm secure emergency funding.
Days after ceasing operations and furloughing its employees, Virgin Orbit initiated the development of comprehensive insolvency contingency plans.
The commercial space satellite venture founded by Sir Richard Branson’s Virgin Group is collaborating with restructuring firms Alvarez & Marsal (A&M) and Ducera on contingency plans if it cannot secure new funding.
The decision to hire advisors highlights the precarious financial condition of Virgin Orbit. Which continues to negotiate with a small number of potential investors for sufficient funding to resume its operations.
Sir Richard’s holding firm owns 75% of Virgin Orbit, which trades on Nasdaq in New York.
Its worth fell further after the January British mission in Cornwall failed.
After coming public in 2021 through a $3.7bn (£3bn) merger with a special purpose acquisition company. Its listed shares are now worth only $217m (£177m).
According to sources, the insolvency planning work involving A&M and Ducera was being conducted in the United States.
A&M helped Virgin Atlantic Airways recapitalize during the COVID-19 epidemic.
On Sunday evening, it was unclear who was interested in providing Virgin Orbit with ongoing funding. Although a source indicated that Boeing, which has previously invested in the company, was not in discussions with it.
It is believed that Virgin Orbit intends to raise additional capital this week, the source added.
Dan Hart, the chief executive officer of Virgin Orbit, had hoped to launch a second mission in the coming weeks. But this is unlikely unless the company secures additional funding.
A spokesperson for Virgin Orbit stated last week: “Virgin Orbit will begin a company-wide operational pause on March 16, 2023, and will provide an update on future operations in the following weeks.
On the operations side, our investigation is nearing completion, and our next production rocket with the required modification is in its final phases of integration and testing.
According to sources close to Virgin Group, Sir Richard Branson’s privately held enterprise has contributed more than $1bn (£818bn) to Virgin Orbit, including $60m (£49m) since November 2022.
According to an insider, the company’s funding was insufficient to combat the strong headwinds and liquidity crisis it was confronting.
Virgin Orbit was sure it was taking decisive action to protect employees and company assets while evaluating alternatives.
Virgin Orbit was created in 2017 to launch small commercial satellites from a Virgin Atlantic Boeing 747.
According to a spokesperson, the corporation has launched 33 satellites into their desired orbit during four successful missions.
Taking Virgin Orbit public at a valuation of several billion dollars was viewed as validation of Sir Richard’s efforts to build a profitable business enterprise in the space technology industry.
In 2019, he merged his space tourism company, Virgin Galactic, with Social Capital Hedosophia, another SPAC, in a deal that signaled the continuing influx of so-called “blank check” companies.
Mr. Hart, a former Boeing executive, has led Virgin Orbit since its separation from Virgin Galactic.
