Sky News claims that Richard Branson’s private space company, Virgin Orbit, is preparing for bankruptcy in the event it is unable to raise additional capital.
According to Sky News on Sunday, the company is consulting with Alvarez & Marsal and Ducera, two restructuring firms, to come up with a backup plan while it continues discussions with potential investors to help Virgin Orbit restart its operations. Days earlier, Virgin Orbit had announced it was shutting down permanently and laying off the vast majority of its workforce in an effort to reduce expenses.
Virgin Orbit Financial Deterioration
After the disastrous U.K. debut in January, Virgin Orbit’s finances quickly deteriorated. Launching from British soil for the first time, the company’s Start Me Up mission was meant to usher in a new era for Virgin Orbit. It would have been the first time satellites were launched into orbit from British soil, making this liftoff significant for the United Kingdom as well.
Instead, the rocket booster LauncherOne fell to Earth because its engine overheated due to a displaced fuel filter. The rocket malfunction led to the destruction of all nine onboard satellites and sparked an ongoing investigation by British and American authorities.
Concerned investors dumped 22% of their holdings in Virgin Orbit after the rocket malfunction, CNBC reported. The company temporarily halted operations last week while it tried to figure out what to do next.
Even before the most recent rocket failure, Virgin Orbit was showing signs of financial difficulty, with investors pouring $55 million into the company since November of last year. Just five launches have been completed successfully by Virgin Orbit since it began operations in 2021 January.
While the satellite launch company is still trying to figure out what went wrong with its most recent rocket, it is unlikely that it will ever get to see its Cosmic Girl plane in the skies over Great Britain. According to The Telegraph, the Civil Aviation Authority recently informed members of the space industry that Britain does not plan to host another launch in 2023.
Despite the passage of time, Virgin Orbit’s original plan to launch Cosmic Girl with a new LauncherOne rocket within weeks of the incident remains far too ambitious.