Virgin Orbit Files for Bankruptcy Protection

Virgin Orbit, a space launch company founded by billionaire Richard Branson, has filed for Chapter 11 bankruptcy protection in the U.S. after a failed launch attempt from the UK in January.

The company, which uses a modified Boeing 747 jet to air-launch rockets carrying small satellites, said it was looking to sell its assets after laying off most of its 750 employees last week.

The bankruptcy filing comes just three months after Virgin Orbit's sixth mission, which was the first rocket launch out of Britain, ended in failure when an issue during the launch prevented the rocket from reaching orbit.

The mission was carrying satellites for U.S. and U.K. intelligence agencies and was seen as a key test of Virgin Orbit's launch system, which claims to offer flexible and low-cost access to space for small satellites.

Virgin Orbit is one of several companies that have developed air-launch systems, which have the potential benefits of avoiding weather delays, reducing infrastructure costs and reaching multiple orbits from different locations.

However, air-launch systems also face technical challenges as well as market competition from larger and cheaper rockets that can launch multiple satellites at once on so-called ride sharing missions.

Virgin Orbit has successfully reached orbit four times since 2020, but has also suffered two failures that have hurt its reputation and finances. The company went public in 2021 through a merger with a special purpose acquisition company (SPAC), but raised less money than expected and saw its share price plummet after the January mishap.

The company has been looking for new funding for several months, but has not been able to secure enough capital to continue its operations. Branson's Virgin Group, which owns about 75% of Virgin Orbit, said it had invested over $1 billion in the company, including $60 million in secured loans since November.

Virgin Orbit is not related to Virgin Galactic, another Branson-backed space venture that focuses on suborbital flights for space tourists. Virgin Galactic is also publicly traded and has faced delays and setbacks in its test program.

Chapter 11 bankruptcy is a legal process that allows a company to reorganize its debts and assets under court supervision. It can help a company avoid liquidation and continue operating while it seeks a buyer or a restructuring plan.