Richard Branson-backed satellite launch company Virgin Orbit has filed for bankruptcy in the US just months after attempting the first rocket launch from UK soil.
In January 2023, repurposed jumbo jet Cosmic Girl took off from Newquay Spaceport in Cornwall with Virgin Orbit’s rocket LauncherOne under one of its wings. However, the rocket failed to make it into orbit with its payload after suffering a fault high above the Atlantic Ocean.
The launch had been accompanied by major fanfare from the government - although it also prompted a social media gaffe from Grant Shapps. Ministers had hoped a successful mission would lead to the UK becoming a centre for further space rocket launches.
It had also been hoped that the type of launch Virgin Orbit offered would become much more common. With the Russia-Ukraine war meaning Western satellite launches have been all but barred from using Russian soil and the country’s Soyuz rockets, satellite companies have been seeking alternative ways to get their equipment into space. The latest developments at Virgin Orbit have thrown the technology into doubt.
So, who owns Virgin Orbit - and why has the company filed for bankruptcy?
What is Virgin Orbit?
Based in Long Beach in the US state of California, Virgin Orbit is a company that launches satellites into space.
Rather than focusing on getting them into orbit using conventional launch systems - i.e. rockets that take off from launchpads - Richard Branson’s business attaches them to a rocket that is strapped to the underside of a repurposed jet’s wing. Known as Cosmic Girl, the Boeing 747 drops the rocket - known as LauncherOne - from its wing at a high altitude, with the rocket then firing off into space to deliver its satellites.
Virgin Orbit argues that not only is this system cheaper than a conventional one, it is also not as weather-dependent given the aircraft can get above and away from any storms or other phenomena that might affect a launch. Furthermore, it says its launches generate fewer CO2 emissions than standard ones.
Its failure on 10 January means Virgin Orbit has now completed four successful commercial launch missions since January 2021, with only one failed attempt. In a statement, the company said that the latest mission still represented “an important step forward” in its operations.
Who owns Virgin Orbit?
Virgin Orbit was founded by Richard Branson in 2017 as a sister company to his space tourism venture Virgin Galactic.
In the company’s early days, Mr Branson secured investment from Emirati sovereign wealth fund Mubadala, which held 20% of the company by August 2021. It’s unclear whether it still has a holding in the firm.
The rest of the company was held by Mr Branson through Virgin Group - the company he uses to hold shares and invest in all the Virgin brands he has founded, including Virgin Atlantic. At the end of 2021, Virgin Orbit was floated on the US stock market in a move that valued the company at $3.2 billion. This reduced the share held by existing shareholders by around 15% - although Richard Branson is thought to still retain a controlling stake.
Why has Virgin Orbit gone bankrupt?
Signs that all was not well with Virgin Orbit’s financial position came in March 2023, when it paused operations and announced it would lay off 85% of it staff. It said the reason behind its move had been a failure to raise enough new investment in its operations.
Then, on Tuesday (4 April), the company filed for a Chapter 11 bankruptcy in the USA. This form of bankruptcy filing usually means a company is given breathing space from the people it owes money to so that it can reorganise itself. So, while it means Virgin Orbit deems itself to be in dire financial straits, it doesn’t necessarily mean it’s the end for the firm.
In a statement, it explained the move would help it to “effectuate a sale”. Virgin Orbit CEO 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. 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 finalise an efficient and value-maximising sale."
Richard Branson has made no public comment about the news. But his Virgin investment arm is providing $31.6 million (£25.3 million) to ensure Virgin Orbit has enough cash to keep going while it looks for a buyer. Its last market price before its bankruptcy filing put the company’s value at $65 million (£52.4 million).