Richard Branson’s Virgin Orbit Holdings filed for Chapter 11 bankruptcy on Tuesday after the satellite launch company failed to secure the long-term funding needed to help it recover from a January rocket failure.
The Long Beach, California-based company lodged the filing in the U.S. Bankruptcy Court for the District of Delaware seeking a sale of its assets after announcing the layoff of roughly 85% of its 750 employees last week.
“At this stage, we believe that the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale,” Virgin Orbit CEO Dan Hart said in a statement.
The company listed assets of about $243 million and its total debt at $153.5 million as of September 30 in the filing.
Virgin Orbit went public in 2021 through a blank-check deal, raising $255 million less than expected. Spun off from Branson’s space tourism firm Virgin Galactic in 2017, Virgin Orbit air-launches rockets from beneath a modified Boeing 747 plane to send satellites into orbit.
The company’s sixth mission in January with its centerpiece LauncherOne rocket, the first rocket launch out of Britain, failed to reach orbit and sent its payload of U.S. and UK intelligence satellites plunging into the ocean.
Between November and March, Branson’s Virgin Group provided $50 million to the satellite launch company via debt secured against its equipment and other assets in the event of a bankruptcy, according to securities filings.
Virgin Orbit, roughly 75%-owned by Virgin Group, scrambled to find new funding after the January rocket failure, halting operations and furloughing nearly all its employees on March 15 to conserve cash.
Reuters reported last month that Texas-based Matthew Brown had been in talks to invest $200 million in the company. Those talks collapsed, sources told Reuters last week.
The March 30 announcement of about 675 layoffs came as a result of “the company’s inability to secure meaningful funding,” Virgin Orbit said. Those layoffs are expected to be substantially complete by Monday.
Virgin Orbit at the time secured $10.7 million from Branson’s Virgin Investments Limited to fund severance for employees and other expenses tied to the layoffs, which it estimated would cost $15 million.
Virgin Investments will provide $31.6 million in new money to Virgin Orbit through debtor-in-possession financing, Virgin Orbit said Tuesday.
Virgin Orbit had a market value of $65 million based on Monday’s closing price, down from more than $3 billion two years ago.