Here’s how and why Virgin Orbit shuts down
Following bankruptcy filings in April, Virgin Orbit, the small satellite launch company founded by Richard Branson, is closing for good after selling its assets for nearly $36 million.
Descending Parabola for Virgin Orbit.
Tycoon Richard Branson's small California satellite launch company (75% controlled by Branson's Virgin Investment) has announced it will cease operations permanently.
The company was formed in 2017 with the aim of providing launch services for small satellites as a spin-off of Virgin Galactic, and is part of Sir Branson's business empire, which includes the airline Virgin Atlantic and the space tourism company Virgin Galactic. Virgin Orbit's mission was to offer a fast and adaptable space launch service for small satellites, a growing market, with a 21-metre rocket launched from a modified Boeing 747.
On April 4 , the aerospace company filed for Chapter 11 bankruptcy under US bankruptcy law, in preparation for the sale. The decision came after the announced layoffs of 675 employees, or 85% of the workforce, announced the previous week.
The failure of a rocket launch from Cornwall last January sent the share price plummeting leaving the company looking for new funding forcing it to suspend operations. Its main assets are up for auction, from which it fetched just over $36 million. “The figure is just 1% of the value achieved by the company at the end of 2021 on Wall Street, when it was valued at $3.5 billion” notes the Guardian . Virgin Orbit has never made a profit as a public company.
THE SALE OF ASSETS
Rocket Lab, the fast-growing launch start-up has bought Virgin Orbit's rocket factory and equipment for $16.1 million.
Virgin Orbit's converted jet, called the Cosmic Girl, was sold to the maker of the world's largest aircraft, Stratolaunch, for $17 million, substantially below the investment Virgin Orbit made to buy and convert the plane. highlights the Financial Times . Stratolaunch is developing technology to test hypersonic missiles from its ROC aircraft. Prior to its collapse, Virgin Orbit was exploring similar opportunities for Cosmic Girl.
Its Mojave, California-based facility goes to a subsidiary of launch company Vast for $2.7 million.
“While the aircraft and manufacturing facilities have found buyers, blockbuster sales have not been completed for the intellectual property behind Virgin Orbit's unique horizontal launch system or the half-dozen LauncherOne rockets sitting on the factory floor” , a source told the Ft .
THE FAILURE OF VIRGIN ORBIT
On May 23, Virgin Orbit released a statement confirming the sale and thanking its investors and interested parties. The group said it had been "at the forefront of an emerging commercial launch industry" and had made "lasting contributions to the advancement of satellite launching in the US and UK".
Virgin Orbit has filed for bankruptcy after the satellite launch company failed to secure the long-term funding needed to help it recover from the failure of a rocket that took off from British soil last January.
On January 10, the historic attempt by the United Kingdom to become the first European nation to put satellites into orbit failed. The rocket launched by Comisc Girl, a jumbo Boeing 747 of aerospace company Virgin Orbit, which successfully took off from the runway at Spaceport Cornwall, suffered a malfunction during the Start me Up mission, which led to the loss of its payload of nine satellites. If successful, the UK would have become the ninth country in the world capable of putting satellites into orbit and the first to launch commercial satellites from Western Europe. "The disappearance of Virgin Orbit shows how difficult this space race can be and there could be more failures along the way," highlights the BBC .
EFFECT OF A BUBBLE IN THE SATELLITE LAUNCH MARKET?
Virgin Orbit “is one of the major failures of the SPAC market, which went public in 2021 with a valuation of $3.7 billion,” comments Axios .
“The bankruptcy filing revealed that the group had initially sought a sale or a new investment as early as early 2022, weeks after it hit the market” the Financial Times further specifies, adding that “Virgin Orbit had hoped to differentiate itself by offering highly flexible and dedicated launch from anywhere in the world with a suitable runway Potential customers included government and military customers as well as commercial customers. The company reported a backlog of contracts worth $143 million last year.
However, the bankruptcy filing made it clear that Virgin Orbit could not match the prices of rivals, while also struggling to ramp up the pace of launches quickly enough to generate sustainable revenue, the London newspaper points out.
“The small rocket launch industry has seen tremendous growth in recent years, with dozens of companies working to design their rockets to deliver small satellites into orbit for governments and other entities. But analysts have warned that a bubble has formed,” concludes Axios .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/ecco-come-e-perche-virgin-orbit-chiude-i-battenti/ on Fri, 26 May 2023 15:03:11 +0000.