Virgin Orbit, the small-satellite launch provider owned by Sir Richard Branson’s Virgin Group, may have new owners or be dissolved entirely, following a bankruptcy court approval for the sale of the company’s assets. On May 1, the US Bankruptcy Court for the District of Delaware approved a set of bidding procedures for the sale of Virgin Orbit’s assets. The company filed for Chapter 11 bankruptcy with the court on April 4.
The bidding procedures will allow potential bidders to submit non-binding indications of interest by May 4, while formal bids must be submitted by May 15. If multiple qualified bids are submitted, an auction will take place on May 18, followed by a hearing on May 24. Virgin Orbit’s schedule for the sale is consistent with what it had proposed in filings with the court last month, seeking an “expedited” sale that would attract interest from previous and new investors.
Virgin Orbit CEO, Dan Hart, confirmed last month that the company continued to prepare for a LauncherOne return to flight later this year. However, the bidders might propose purchasing a subset of the company’s assets, like its Boeing 747 aircraft, instead of the whole company. This approach would maximize the value of the deal for creditors and effectively break up the company.
The hearing also approved a final order for debtor-in-possession financing, which enables Virgin Orbit to continue operating at a reduced level during the Chapter 11 process, providing the company with up to $74.1 million in loans.
Virgin Orbit had experienced some difficulties in the past year, including the failed LauncherOne mission in January that confirmed a dislodged fuel filter caused the rocket’s upper stage to shut down prematurely. The company also laid off most of its workforce in late March.
Virgin Orbit’s Chief Executive, Dan Hart, said in a statement last month that the company remains committed to working with its investors and creditors throughout the sale process to achieve an optimal outcome for everyone.
The bankruptcy filing was a result of the financial impact of the COVID-19 pandemic on the space industry. Virgin Orbit’s smallsat launch market had been affected by the pandemic-induced global economic slowdown, which had limited investment in new satellite technologies. The company had also faced increased competition in the small satellite launch industry from other companies, including Rocket Lab and SpaceX.
The sale of Virgin Orbit’s assets would likely attract interest from potential buyers, including other companies and investors who want to acquire the company’s technology and assets. Virgin Orbit has developed a unique air-launch system that uses a modified Boeing 747 aircraft to launch small satellites into orbit, which could be a valuable asset for a buyer interested in entering the small satellite launch market.
The bankruptcy court’s approval of debtor-in-possession financing would allow Virgin Orbit to continue its operations during the Chapter 11 process, and potentially attract more interest from buyers. The financing would enable the company to continue to prepare for its LauncherOne return to flight later this year.
Virgin Orbit’s Chief Executive, Dan Hart, remains optimistic about the sale process, stating that the company is making important progress and is committed to achieving an optimal outcome for everyone involved. The upcoming sale of Virgin Orbit’s assets is expected to provide clarity on the future of the company and the small satellite launch industry.