This week, Virgin Orbit Holdings and its U.S subsidiaries announced they have commenced a voluntary proceeding under Chapter 11 of the U.S Bankruptcy Code.
The company has said that with the support of Virgin Investments Limited in the form of debtor-in-possession (DIP) financing, Virgin Orbit will use Chapter 11 to maximise value for its business and assets.
This announcement follows the airline statement outlining it was reducing its workforce as a cost-cutting measure.
This has come about because Virgin Orbit was unsuccessful in raising a sufficient amount of out-of-court capital to allow them to continue operating.
To help the company process and protect its operations, Virgin Investments Limited has given $31.6million in new money DIP financing.
Virgin Orbit will have to wait for approval from the Bankruptcy court, however, once approval is received it should keep the airline afloat and allow a sale of the company to be completed.
The company has said in a press release that they are focused on a swift conclusion to the sale of itself. This will ensure clarity towards the future of its company, employees and vendors.
In the meantime, Virgin Orbit will continue to navigate Chapter 11 Bankruptcy until it can acquire the required funds for sustainable operations.
CEO releases a statement
Dan Hart, CEO of Virgin Orbit released a statement regarding the chapter 11 bankruptcy saying: “The team at Virgin Orbit has developed and brought into operation a new and innovative method of launching satellites into orbit.”
“Introducing new technology and managing great challenges and great risks along the way as we proved the system and performed several successful space flights – including successfully launching 33 satellites into their precise orbit”.
He went on to say: “While we have taken greats efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business.”
“We believe that the cutting edge launch technology that this team has created will have wide appeal to buyers as we continue in the process to sell the company.”
“At this stage, we believe that the chapter 11 process represents the best path forward to identify and finalise an efficient and value maximising sale.”
About Virgin Orbit
Virgin Orbit Holdings was founded by Richard Branson in 2017. The company began operations in 2021 and operates one of the most flexible and responsive space launch systems ever built.
The platform used is a modified Boeing 747-400, able to carry the “LauncherOne” rocket under its left wing, where the rocket carrying the satellites was then launched from a high altitude into space.
The fact Virgin Orbit uses a Boeing 747-400 to launch its satellites means the company has a very flexible launching system.
This is because this 747 can travel to any location like any commercial airliner and then launch its satellites from its desired location.
Furthermore, up until the airline filing for bankruptcy this year, the company has successfully managed to deliver commercial, civil, national security and international satellites into orbit.
In addition, the company’s 747 also has a bit of history. The aircraft used to operate for British airline Virgin Atlantic from 2001 to 2015 carrying the registration G-VWOW.
Then in 2015 it was re-registered to N744VG and re-configured to its satellite launch configuration we know today.