- Virgin Orbit will be ceasing its operations for the foreseeable future after the company has failed to secure funding.
Virgin Orbit will be ceasing its operations for the foreseeable future after the company has failed to secure funding, according to CNBC. This was revealed by CEO Dan Hart during an all-hands meeting on Thursday afternoon. The company will also be laying off about 90% of its workforce.
“Unfortunately we’ve not been able to secure the funding to provide a clear path for this company,” said Hart said during the meeting via CNBC.
Hart was giving company employees brief daily updates over the past week as the company had delayed a scheduled all-hands meeting to Thursday. The company was having late-stage deal talks, which ended up falling through with a few investors over the past week.
Virgin Orbit had brought back some of its employees following an operational pause and a furlough that occurred on March 15. The company has been working on finishing an investigation into a mid-flight failure of a previous launch along with finishing a launch of its next rocket.
Virgin Orbit had developed a system that used a modified 747 jet for sending satellites into space by dropping a rocket from under the wing mid-flight. The company’s previous mission had suffered from a mid-flight failure where the rocket did not reach orbit and it crashed into the ocean.
Virgin Orbit spun out of Sir Richard Branson’s Virgin Galactic in 2017. And Branson was the largest stakeholder at a 75% stake. Emirati sovereign wealth fund Mubadala is the second largest stakeholder at 18%.
Bankruptcy firms were hired to set up contingency plans and Branson has a first priority for Virgin Orbit’s assets as the company had raised $60 million in debt from the investment arm of Virgin Group. The company’s board of directors also approved a “golden parachute” severance plan for top executives in case they are terminated following changes in control of the company.
