The Virgin Orbit satellite launch company, linked to the British Richard Branson’s Virgin group, began the voluntary procedure on Tuesday to seek protection under Chapter 11 of the United States Bankruptcy Code. The objective is to proceed with the sale of this business and its assets, maximizing their value as much as possible. Last week Virgin Orbit announced that it will lay off 85% of the workforce, some 675 employees, and the cessation of its activities, after not being able to access the necessary financing to continue with its activity.
Proceedings have been filed in the United States Bankruptcy Court for the District of Delaware by Virgin Orbit Holdings and its US affiliates. For the sale of Virgin Orbit, it has the support of Virgin Investments Limited in the form of import financing of 31.6 million dollars (29 million euros).
After obtaining the green light from the Bankruptcy Court, this financing is expected to provide Virgin Orbit with the necessary liquidity to continue operating as it moves through the marketing process initiated to sell the company and a transaction that will seek to maximize value for the business and your assets.
The company has indicated that it expects a speedy conclusion of its sale process to clarify the future for its customers, suppliers and employees, adding that, in the meantime, Virgin Orbit will continue to operate under the jurisdiction of the bankruptcy court and in accordance with applicable provisions of the United States Bankruptcy Code.
The company, founded in 2017 and focused on the development of rockets to transport small satellites, did not achieve benefits as a listed company and its position was aggravated when last January it failed in the attempt to carry out the first launch into space of United Kingdom.
Virgin Orbit has already begun to slim down its structure and announced a few days ago a reduction in staff of some 675 employees, around 85% of the company’s workforce, in order to reduce expenses due to the inability “to secure significant financing “. In this sense, the company has reported that the layoffs will affect “all areas of the company”, which it estimates will incur import charges of approximately 15 million dollars (13.8 million euros), including payment about 8.8 million dollars (7.8 million euros) in severance payments and other benefits, in addition to another 6.5 million dollars (6 million euros) in other costs.
