Virgin Orbit seeks bankruptcy protection after mission fail

Richard Branson’s Virgin Orbit is filing for Chapter 11 bankruptcy protection after a failed mission this year and increasing difficulty in raising funding for future missions.

The company laid off most of its staff on Friday and told the U.S. Bankruptcy Court for the District of Delaware in a filing Tuesday that it was looking to sell its assets.

Virgin Orbit said that it has secured $31.6 million in debtor-in-possession financing from Branson’s Virgin Investments Ltd.

Virgin Orbit CEO Dan Hart said that once the financing is approved by the bankruptcy court, the funds are expected to provide Virgin Orbit with the necessary liquidity to continue operating as it attempts to sell the company.

“While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business,” Hart said.

The Long Beach, California, company said in its bankruptcy filing that it has between 200 and 999 estimated creditors. It had approximately $243 million in total assets and $153.5 million in total liabilities as of Sept. 30, according to a regulatory filing.

Last week Virgin Orbit said that it was cutting 675 jobs, about 85% of its workforce. Shortly before the announcement, the company said that it was pausing all operations amid reports of possible job cuts. At the time Virgin Orbit confirmed that it was putting all work on hold, but didn’t say for how long.

In January, a mission by Virgin Orbit to launch the first satellites into orbit from Europe failed after a rocket’s upper stage prematurely shut down. It was a setback in the United Kingdom which had hoped that the launch from Cornwall in southwest England would mark the beginning of more commercial opportunities for the U.K. space industry.

The company said in February that an investigation found that its rocket’s fuel filter had become dislodged, causing an engine to become overheated and other components to malfunction over the Atlantic Ocean.

Virgin Orbit, which is listed on the Nasdaq stock exchange, was founded in 2017 by British billionaire Branson to target the market for launching small satellites into space. Its LauncherOne rockets are launched from the air from modified Virgin passenger planes, allowing the company to operate more flexibly than using fixed launch sites.

Shares of Virgin Orbit Holdings Inc., which traded above $10 about two years ago, tumbled 24% before the opening bell Tuesday, to about 15 cents.