Richard Branson’s Virgin Orbit files for bankruptcy after axing 85% of workforce

Virgin Orbit has filed for Chapter 11 bankruptcy protection after failing to secure the funding needed to recover from a January rocket failure.

It comes just days after the California-based satellite launch company said it was laying off 85 per cent of its 750 staff and ceasing operations for the foreseeable future.

Virgin Orbit is 75 per cent owned by Sir Richard Branson's Virgin Group. It lodged the filing in the US Bankruptcy Court for the District of Delaware seeking a sale of its assets.

It listed assets of about $243m (£195m) and its total debt at $153.5m (£123m) as of 30 September in the filing.

Virgin Orbit chief executive Dan Hart said: “The team at Virgin Orbit has developed and brought into operation a new and innovative method of launching satellites into orbit, introducing new technology and managing great challenges and great risks along the way as we proved the system and performed several successful space flights, including successfully launching 33 satellites into their precise orbit.

“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.

“At this stage, we believe that the Chapter 11 process represents the best path forward to identify an efficient and value-maximising sale.”

In January, the company aborted the UK's first satellite launch from Cornwall, blaming an “anomaly”. The LauncherOne rocket failed to reach orbit and sent its payload of US and UK intelligence satellites plunging into the ocean.

The rocket and the nine satellites it was carrying, burned up in the atmosphere after the launch failed.

The launch was an opportunity for Virgin Orbit to show its investors what it was capable of, but the failure has led to its tanking as much as a third in after-hours trading and is set for a $200m fall.

The launch was set to be the first-ever rocket launch from UK soil, as well as the first time that satellites have been launched from Europe.

Between November and March, Sir Richard’s Branson Virgin Group provided $50m (£40m) to the satellite launch company through debt secured against its equipment and other assets, according to securities filings.

Virgin Orbit had a market value of $65m (£52.4m) based on Monday’s closing price, down from more than $3bn (£2.4bn) two years.