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Virgin Orbit, a space business, has declared bankruptcy in the United States after failing to get new finance.
The satellite launch company has ceased operations but is looking for a buyer.
The California-based company stated last Monday that it would lay off 85% of its 750-person workforce.
Earlier this year, Virgin Orbit’s rocket failed to launch its first satellite from British territory.
While the company has “made great efforts” to handle its finances and obtain additional money, Dan Hart, CEO of Virgin Orbit, says, “We must do what is good for the business.”
He stated that Virgin Orbit’s goal will now be to find a buyer “to give customers, vendors, and staff confidence in the company’s future.”
Virgin Orbit was established in 2017 as a spin-off of Sir Richard Branson’s Virgin Galactic space travel company.
Satellites are launched into space by rockets launched from beneath modified Boeing 747 jets.
However, the first attempt to launch a satellite into orbit from the United Kingdom failed in January due to a loose rocket fuel filter, causing one of the engines to overheat.
The project launch from Newquay’s Spaceport Cornwall was hailed as a watershed moment in UK space exploration.
It was thought that it would be a crucial step in transforming the UK into a worldwide participant, from satellite manufacturing through rocket assembly and establishing new spaceports.
Following the failure of the UK rocket, Virgin Orbit failed to attract new funding and, in order to conserve money, halted operations last month.
The company’s shares were listed on the Nasdaq index in New York in September of last year, and it owed $153.5 million (£123 million).
The business announced on Tuesday that Virgin Investments, a division of Virgin Group, will provide $31.6 million to assist Virgin Orbit in finding a buyer.
It has filed for Chapter 11 bankruptcy protection in the United States. This enables a company to continue operating and deal with financial challenges while protecting creditors’ money.
Former Virgin Galactic president Will Whitehorn argued that the company’s demise was exacerbated by its catastrophic launch in Cornwall and the loss of Silicon Valley Bank when it sought additional capital.
Mr. Whitehorn, on the other hand, argued that the company deserved a second opportunity because there was “a huge amount of lot of demand” in the industry.
The news concerning Virgin Orbit was “extremely upsetting,” said Melissa Quinn, executive director of Spaceport Cornwall, but the site would “remain focused on promoting the global space sector.”
She also stated that it was the only licensed spaceport in the UK; therefore, it had several users and collaborated with other launch operators, such as Sierra Space in the United States.
Virgin Orbit is likely to bounce back
Some space companies have gone bankrupt, only to emerge a few months later with new owners, no debts, and a huge financial reserve to take the business ahead.
Consider OneWeb, a London-based startup that has only recently completed its sky-high broadband internet constellation.
So, who is going to acquire a rocket company? Hundreds, if not thousands, of such companies manufacture small launch vehicles around the world.
If Sir Branson’s company can claim one fundamental distinction, it should be reactivity – its jumbo aircraft platform’s capacity to deploy anywhere. Something has military appeal, for example. But, the firm has struggled to do so, with only two launches last year.
Each new owner will want to determine if frequent launches are viable. This means that the company’s initial monthly target of growing has been met.
Notwithstanding the financial challenges, Mr. Hart was certain that the company’s team’s “cutting-edge launch technology” creation would have “broad appeal” to a new owner.
AJ Bell’s Danni Hewson, head of financial analysis, remarked that the botched UK launch was “not the best promotion” for the company’s technology.
The UK Space Agency stated that it has worked with Virgin Orbit for many years, but the difficulties were mostly financial.
It added that the UK space industry is “thriving,” with a yearly revenue of £17.5 billion.
Sir Richard is one of the few billionaires whose enterprises have expanded to include satellite launches and plans for commercial space exploration.
Others include Jeff Bezos, the founder of Amazon and Blue Origin, and Elon Musk, the owner of Twitter and the founder of Tesla and SpaceX.
Sir Branson and the Virgin Group have spent more than $1 billion on the venture, using Virgin Orbit to launch satellites and construct reusable “space planes” to transport passengers to sub-orbital space.
Virgin Galactic has already started selling $250,000 seats for these journeys, and celebrities like Justin Bieber have already signed up.
Read Also: Virgin Orbit approves mass lay off
Yet, the primary players in the “billionaire space race” have been chastised for providing “joy rides” for the super-rich at a time when countries throughout the world are being devastated by climate change.
Mr. Bezos, on the other hand, has stated that his space research is part of a greater environmental ambition to “transfer all heavy industry, all polluting industry into space, and keep Earth as this marvelous gem of a globe that it is.”