Last Friday, there was a story that Virgin Orbit may have had an investor step in and rescue the company. Today, the story is that the deal fell through and the company has laid off a large majority of its employees.
In a Securities and Exchange Commission filing, Virgin Orbit announced it was laying off approximately 675 employees, or 85% of its workforce. The company said the layoff was necessary “to reduce expenses in light of the Company’s inability to secure meaningful funding.”
The company had furloughed most employees March 15 as part of a pause in operations as it sought to raise money. A week later it brought back a small number of employees to continue preparations for the next LauncherOne mission from the Mojave Air and Space Port in California.
Last week, the company and venture capitalist Matthew Brown were optimistic that the details could be worked out and had set the date of last Friday (March 24th) as when they would complete things. That deal has evidently fallen through. Virgin has said they are looking for other investors but as of March 30th have not announced anything.
As talked about in a March 17th posting on Virgin's troubles, the company raised $60 million in four separate fundings from Virgin Investments Limited (VIL), the investment arm of Virgin Group. Those deals came with interest rates as high as 12% and gave VIL “first-priority security interest” to Virgin Orbit’s assets, including its Boeing 747 aircraft.
Independent estimates suggest that Virgin Orbit spent as much as $1 billion to develop and test its LauncherOne rocket and air-launch system. The company made its first successful launch in January 2021 and has averaged one mission every six months since then. Virgin Orbit went public in 2021, but it raised just $68 million and had to turn to private investments for an additional $160 million to keep operating.
Most recently, Branson has been propping up the company's finances. He invested $25 million in November 2022 and another $20 million in December 2022. Importantly, this was a secured note, giving Branson priority as a creditor for the company's assets, including "all aircrafts, aircraft engines (including spare aircraft parts), and related assets."
Virgin Orbit's "first stage", named Cosmic Girl, which carries Launcher One above the densest part of the atmosphere.
When the financial agreements stipulate that VIL gets, "all aircrafts, aircraft engines (including spare aircraft parts), and related assets", I assume that has to include this aircraft. Look for it to be Richard Branson's plane.
EDIT to ADD: Just as I'm getting ready to hit the "Publish" button, a UPI story breaks through saying,
Earlier this month, Virgin Orbit furloughed nearly 600 of its employees and suspended operations after a failed satellite launch.
A week later, the company said in an SEC filing it would start an "incremental resumption of its operations."
Thursday's news the company was unable to secure new funding means the restart will not happen.