Ajit Karn
According to a BBC report, Sir Richard Branson’s Virgin Orbit has filed for bankruptcy in the United States after failing to secure new investment. The news source reported that the company ceased operations weeks ago and is currently seeking a buyer. Virgin Orbit was founded in 2017 and is Mr. Branson’s Virgin Galactic’s sister enterprise. Earlier this year, the company suffered a significant setback when an attempt to launch the first rocket into space from British territory failed.
Together with the UK Space Agency and Cornwall Spaceport, the company had organized the mission to launch nine satellites into space.
The California-based company announced last week that it was firing off 85 percent of its workforce, or approximately 675 people, to reduce expenses due to its inability to secure adequate funding.
Dan Hart, the chief executive officer (CEO) of Virgin Orbit, stated that the company made “extraordinary efforts” to resolve the financial issues. The BBC quoted him as saying, “However, we must ultimately do what is best for the business.”
In a regulatory filing dated Tuesday, the company stated that “it initiated a voluntary proceeding under Chapter 11 of the US Bankruptcy Code… to effectuate a sale of the business” and intended to use the procedure “to maximize the value of its business and assets.”
Chapter 11 offers protection from creditors to those who owe money.
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Monday evening, Virgin Orbit’s shares on the New York Stock Exchange were down 3% to 19 cents.
According to the BBC, Virgin Orbit, whose shares will be listed on the Nasdaq index in New York in 2021, had $153.5 million in debts in the previous year.
