The space company Virgin Orbit, which specializes in satellite launches and is owned by British billionaire Richard Branson, has gone bankrupt and is to be sold. The company filed for US bankruptcy with protection from creditors’ claims on Tuesday.
Virgin Orbit has been struggling with losses for some time, with a failed satellite launch earlier this year practically ending the business. What makes Virgin Orbit special is that the rockets will be launched from a converted Boeing 747.
The company was spun off in 2017 from Branson’s other space company Virgin Galactic, which wants to offer tourist flights into space, among other things. Virgin Orbit has been listed on the stock exchange since 2021, and the share price has been deep in the basement for months.
Not just one problem, but many
In the end, the problems were obvious. In mid-March, Virgin Orbit announced that it would pause operations for the time being. Last week the number of employees was drastically reduced after no fresh money could be obtained. With 675 employees, around 85 percent of the workforce should lose their jobs.
And just hours before filing for bankruptcy, Virgin Orbit admitted it won’t be able to complete its 2022 annual report on time. According to preliminary figures, a loss of a good 191 million dollars (almost 175 million euros) with sales of around 33 million dollars is expected for the past year, it said. Cash reserves had dwindled to just over $50 million by the end of 2022.
A procedure with bankruptcy protection under Chapter 11 of the US bankruptcy law is now seen as the best way for a sale, it said on Tuesday. Company boss Dan Hart pointed out that in four launches, 33 satellites were successfully put into orbit. Branson’s Virgin Investments are expected to provide $31.6 million to keep the company afloat during the attempted sale.
Interested parties wanted
The hope is that someone will be interested in the technology of launching carrier rockets from aircraft. An advantage should be more flexibility, since you don’t have to rely on launch pads on the ground. Branson relied on high demand, among other things, with the launch of thousands of satellites for Internet from space.
Virgin Orbit wanted to launch a satellite from the UK for the first time in January. The rocket took off from the plane with no problems, but failed en route to space. According to the subsequent investigation, a fuel filter in the second stage of the rocket caused the crash. It was said to have shifted and throttled the fuel supply to the engine.
The space industry has increasingly become a playground for billionaires in recent years – and Branson was a pioneer. The 72-year-old, who once became known as a music entrepreneur and airline owner, founded Virgin Galactic back in 2004. A direct competitor is Amazon founder Jeff Bezos’ company Blue Origin, which also offers tourist flights into space. Tesla boss Elon Musk is successful with his space company SpaceX, which works for NASA, among other things.
