Richard Branson is shutting down Virgin Orbit – and selling off assets worth $36 million
Billionaire Richard Branson’s satellite launch startup Virgin Orbit announced it is shutting down and selling off all assets worth $36 million.
Branson has had several missteps with his satellite launching venture, particularly the disastrous failed orbital mission in the UK, which had received more than $20 million in funding from British taxpayers.
The company had paused operations in March, then filed for Chapter 11 bankruptcy protection in the US in early April, but is now completely closing shop.
The sold assets, including its jet Cosmic Girl and most of its California headquarters, have been auctioned off to four winning bidders, three of which are aerospace companies.
Virgin Orbit was founded in 2017 by Branson in hopes of targeting the market for launching small satellites into space – an industry widely owned by Elon Musk’s SpaceX.
Virgin Orbit is Richard Branson’s satellite launching company which has struggled to raise money to fund missions.
Branson’s company paused all operations in March due to slow finance-raising and the disastrous failed launch attempt from Cornwall.
However, more than $20 million of British taxpayer money funded the scrubbed launch.
Just 24 hours after January’s failed launch, MailOnline revealed how Virgin Orbit was fighting for survival.
At the time, shares in the firm plummeted by as much as 30 percent.
This over $200 million loss came just months after Virgin Orbit raised ‘substantial doubts’ about its future amid dwindling cash supplies.
The failed orbital mission was found to be caused by a dislodged fuel filter.
Virgin Orbit had been working to establish the cause of the problem since its 70-foot-long LauncherOne booster disintegrated over the Atlantic shortly after being fired from a jumbo jet that took off from Cornwall.
Engineers say the dislodged filter caused an engine to overheat, leading to the malfunction of components and the premature shutdown of the rocket’s thrust.
This meant LauncherOne never reached the required altitude to deliver its payload of nine satellites into orbit.
Instead, the booster fell back to Earth within the approved safety corridor in the Atlantic Ocean. It was caught on camera by an observer in Lanzarote, one of the Canary Islands off the west coast of Africa.
Richard Branson started Virgin Orbit in 2017
‘Virgin Orbit’s legacy in the space industry will forever be remembered,’ Virgin Orbit said in a Tuesday statement.
‘Its groundbreaking technologies, relentless pursuit of excellence, and unwavering commitment to advancing the frontiers of air launch have left an indelible mark on the industry.’
As previously announced, on April 4, 2023, the Company and its US-based subsidiaries filed a voluntary proceeding under Chapter 11 to effectuate a sale of the business.
The combined total proceeds were determined by a rigorous and competitive auction which maximizes the value of the estate and minimizes the remaining duration of the Company’s restructuring.
Rocket Lab, Stratolaunch and Vast Space subsidiary Launcher – with combined bids totaling almost $36 million – are the three aerospace companies that scooped up Virgin Orbit’s assets.
Rocket Lab spent $16,118,684 for “Conant Machinery & Equipment and Lease,” according to court documents.
Approximately $17 million was dished out by Stratolaunch, which purchased an aircraft, likely Cosmic Girl and ‘Related Assets.’
And Launcher’s $2.7 million bid went to the ‘Mojave Facility Lease, Machinery & Equipment, and Inventory.’
Virgin Orbit is a spinoff of Branson’s Virgin Galactic space tourism venture, which has only taken him and his entourage into space, which is also shrouded in controversy.
Branson conducted the first private space flight on July 11, 2021, but two months later, Virgin Galactic was barred from flying its SpaceShipTwo again until it worked out why the rocket veered off course during the mission.
And in November 2021, Branson was faced with a lawsuit by shareholders who claimed he hid issues with Virgin Galactic’s space program and sold millions of stock at inflated prices.
A US judge ordered Branson, 71, to answer allegations he concealed problems in the program after being sued for ‘deliberately sending faulty rockets to space.’
While dismissing most claims in the proposed class action, US District Judge Allyne Ross in Brooklyn said shareholders could try to prove Virgin and Branson defrauded them into overpaying for shares, which now trade over 90 percent below their February 2021 peak.
Shareholders can sue over July 2019 statements Virgin had made ‘great progress’ overcoming ‘hurdles’ to commercial spaceflight, despite a near-disastrous test flight five months earlier when its rocket plane Unity suffered critical damage.
Branson must also defend his July 2021 statement his own just-completed flight on Unity, where he soared 50 miles above the earth, had been ‘flawless’ though Unity had strayed from its assigned airspace.
However, Virgin Galactic has set May 25 for its next crewed spaceflight, which will include eight people.