Richard Branson's Virgin Orbit files for bankruptcy

Richard Branson's Virgin Orbit, a California-based space launch provider, has filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware. Virgin Orbit Holdings is seeking to continue its operations during the bankruptcy process as a "debtor-in-possession".

The spacetech company has been struggling financially, despite successfully launching 33 satellites into orbit. It previously announced plans to reduce its workforce after it was unable to raise sufficient capital to continue operating at its current run rate.

"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," said Dan Hart, CEO of Virgin Orbit, in a statement.

To support its operations during the bankruptcy process, Virgin Orbit has secured debtor-in-possession financing of $31.6 million from Virgin Investments Limited. This financing will help the company to continue operating and complete the marketing process for a sale. The company intends to continue operating as usual under the jurisdiction of the bankruptcy court and in accordance with the provisions of the US Bankruptcy Code.

"We believe that the cutting-edge launch technology that this team has created will have wide appeal to buyers as we continue in the process to sell the Company. 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," Hart said.

This news comes in after 85% of Virgin Orbit's workforce was laid off, affecting 675 employees. Earlier, on January 9, Virgin Orbit's LauncherOne suffered a malfunction during its first-ever orbital launch attempt from the United Kingdom, which caused the rocket to crash into the ocean.

British billionaire Richard Branson founded the company in 2017 after it branched out from the space-tourism company Virgin Galactic. The company launches its rockets from a modified Boeing 747-400 carrier aircraft.