In bankruptcy filings, the company said it had approximately $243 million in assets and $153.5 million in debt as of Sept. 30 last year.
Virgin Orbit launches commercial satellites and is a sister company of Virgin Galactic, which operates in the space tourism sector. In January, the company failed a mission to launch nine small satellites from Britain into low Earth orbit. The failure was a major blow to the company and deepened its financial difficulties.
Chapter 11 of the Insolvency Act
“At this stage, we believe that a Chapter 11 proceeding represents the best path to identify and complete a favorable sale with maximum profit,” he said, according to the agency Reuters Virgin Orbit CEO Dan Hart.
Virgin Orbit will lay off 85 percent of its workforce and appear to be out of business soon
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Chapter 11 of the US bankruptcy code protects the business from the claims of creditors and gives it time to reorganize.
“We have no choice but to make immediate, dramatic and extremely painful changes,” Hart said, according to the site CNBC last week on Thursday for a staff meeting.
From November to March, Branson’s Virgin Group provided the satellite launch company with $50 million through a loan secured by Virgin Orbit’s equipment and other assets in case of bankruptcy. Virgin Orbit, which is roughly 75 percent owned by the Virgin Group, has struggled to find new funding after the rocket failed in January.
The first satellites launched from Western Europe did not reach orbit
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In mid-March, Virgin Orbit shut down operations and laid off almost all employees to save money. At the time, Branson’s investment company Virgin Investments invested roughly $10.9 million (more than CZK 235 million) in Virgin Orbit to finance severance pay and other costs related to the reduction in the number of employees.
Virgin Orbit expects that payments to laid-off employees and other costs will amount to approximately $15 million (CZK 322 million). Virgin Investments will provide another loan of $31.6 million (almost CZK 680 million) to Virgin Orbit.
The market value of Virgin Orbit on Monday was approximately 65 million dollars (approximately 1.4 billion CZK). Two years ago, it exceeded three billion dollars (approx. 64 billion crowns).
