Virgin Orbit, Sir Richard Branson’s rocket company, filed for bankruptcy in the US due to lack of funding.
The satellite launch company ceased operations several weeks ago but hopes to locate a buyer.
The California-based company announced last week that it would lay off 85 percent of its 750 employees.
This year, a Virgin Orbit rocket failed to successfully launch a satellite from UK territory for the first time.
Dan Hart, the CEO of Virgin Orbit, stated that despite the company’s “considerable efforts” to resolve its finances and secure additional funding, “we must ultimately do what is best for the business.
“To provide clarity on the company’s future to its customers, vendors, and employees,” Virgin Orbit will seek a buyer.
Virgin Orbit was established in 2017 as a spin-off of Sir Richard Branson’s space tourism enterprise, Virgin Galactic.
It launches satellites into space from beneath modified Boeing 747 aircraft by launching missiles.
In January, however, the United Kingdom’s first attempt to launch a satellite into orbit failed. Because a rocket fuel filter became dislodged, causing one of the motors to overheat.
British space research advanced with the launch from Spaceport Cornwall near Newquay.
It was hoped that it would be a major step in assisting to transform the United Kingdom into a global player, from satellite manufacturing to rocket construction and the creation of new spaceports.
Virgin Orbit, which is majority-owned by Virgin Group, halted operations last month to conserve cash following the UK rocket failure.
The company, whose shares will be listed on the Nasdaq index in New York in 2021, had $153.5m (£123m) in debts as of September of last year.
Tuesday, the company announced that Virgin Investments, a subsidiary of the Virgin Group, would provide $31.6 million in new capital to assist Virgin Orbit with its buyer search.
It has filed for Chapter 11 bankruptcy protection in the United States. This allows a business to continue operations and address its financial issues while protecting it from its creditors.
Will Whitehorn, former president of Virgin Galactic, stated that the disastrous launch in Cornwall and the failure of Silicon Valley Bank at the time the company was attempting to raise new capital contributed to its demise.
However, Mr. Whitehorn argued that the company merited a second chance because there was “considerable demand” in the industry.
“Remember, they’ve already launched nearly 50 satellites into space, so I think there’s a chance they’ll return,” he said.
Melissa Quinn, the director of Spaceport Cornwall, described the news about Virgin Orbit as “extremely disappointing” but stated that the site would “continue to advance the international space industry.”
She stated that it was the only licensed spaceport in the United Kingdom, had multiple users, and collaborated with other launch operators, such as Sierra Space from the United States.
This is not the final chapter for Virgin Orbit.
Numerous space companies have filed for Chapter 11 bankruptcy, only to reemerge a few months later with new proprietors, no debts, and a sizable investment cash reserve to propel the business forward.
OneWeb, a London-based firm, recently completed its broadband internet constellation in the sky.
Who, however, will purchase a rocket business? There are dozens, if not hundreds, of organizations developing miniature launch vehicles across the globe.
If Sir Richard Branson’s company can claim one key differentiator, it should be responsiveness. The capacity of its jumbo jet platform to take off from anywhere in a hurry. This is appealing, for instance, to the military. However, the company has had great difficulty achieving this feat, launching only twice in the past year.
Therefore, any prospective new proprietor will want to know that a high frequency of launches is possible. This means increasing every month, which was the company’s original objective.
Mr. Hart stated that despite the company’s financial difficulties, he was confident that it would be attractive to a new owner. Because its team had developed “leading-edge launch technology.”
AJ Bell’s director of financial analysis, Danni Hewson, stated that the company’s failed launch mission from the United Kingdom was “not the best advertisement” for its technology.
“Neither is the collapse of Virgin Orbit the best advertisement for the space investment theme,” she added.
This industry may have significant potential at some point in the unforeseeable future. But investors who have attempted to reach for the heavens have been burned in the past.
Virgin Orbit’s issues were business, according to the UK Space Agency.
It added that the UK space sector is “thriving” and generates an annual income of £17.5 billion.
Sir Richard is one of a few billionaires whose businesses include satellite launches and commercial space flight.
Others include Jeff Bezos, founder of online retailer Amazon, who founded Blue Origin, and Elon Musk, proprietor of Twitter and Tesla, who founded SpaceX.
Sir Richard Branson and the Virgin Group have invested more than $1 billion in the business to launch satellites through Virgin Orbit and to develop reusable “space planes” for suborbital space tourism.
Virgin Galactic has already begun selling $250,000 reservations for these trips, and celebrities like Justin Bieber have signed up.
However, the major participants in the “billionaire space race” have also been criticized for providing pleasure rides for the ultra-wealthy at a time when countries around the world are experiencing the effects of climate change.
However, Mr. Bezos has insisted in the past that his space exploration is in part an environmental mission “to take all heavy industry, all polluting industry, and move it into space to preserve the Earth as the beautiful jewel that it is.”
