Branson and Virgin Orbit creditors raise $36 million from fire sale

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Sir Richard Branson’s dream of launching rockets into space from under the wing of a converted 747 jet ended on Monday with rivals picking up Virgin Orbit’s assets of just over $36m.

The breakup price represents just 1 percent of the $3.7 billion value attributed to Virgin Orbit in December 2021, when the rocket-launching company merged with a special purpose acquisitions company, or SPAC, to debut on the Nasdaq. It’s also a fraction of the $1 billion Branson-based Virgin Investments says it has injected into the venture.

Rocket Lab, the fast-growing launch start-up with offices across the street from Virgin Orbit headquarters in Long Beach, California, has purchased the company’s 140,000-square-foot 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. 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.

A third space company, Launcher Inc, recently acquired by Vast, a private space station company, bought the Virgin Orbit launch site and leased it in the Mojave Desert for $2.7 million.

Including the sale of laptops and office equipment, the auction will have raised approximately $36.5 million for lenders. Branson’s Virgin Investment controlled about 75% of the company.

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, he said a person familiar with the auction. However, it’s unclear whether the rockets are usable on another launch pad or the IP without the aircraft.

Virgin Orbit released a statement on Tuesday evening confirming the sale and thanking its investors and interested parties. The group said it had been “in the vanguard of an emerging commercial launch industry” and had made “lasting contributions to the advancement of satellite launching in the US and UK”.

“Virgin Orbit’s legacy in the space industry will be remembered forever,” he said.

The company has laid off most of its workforce and filed for chapter 11 protection from creditors in April, with $700,000 left in the bank.

Months of crisis talks with potential investors had failed to secure new funding for the company, which had burned through nearly $50 million a quarter in its race to grab a share of the rapidly growing launch market.

The auction ends a five-year effort by Branson to tap into the industry. Orbit was spun off in 2017 from entrepreneur Virgin Galactic’s space tourism business and brought in other investors including Boeing and Emirati sovereign wealth fund Mubadala. The bankruptcy filing revealed that the group had initially sought a sale or new investment as early as early 2022, weeks after it hit the market.

Virgin Orbit had hoped to differentiate itself by offering highly flexible and dedicated launch services from anywhere in the world with a suitable runway. His system carried the LauncherOne rocket 35,000 feet above the Earth, from where the rocket was sent into space with its payload of satellites.

Potential clients included government and military clients as well as commercial clients. The company reported a backlog of contracts worth $143 million last year. However, the documents make clear that Virgin could not match the prices of rivals, while also struggling to ramp up the pace of launches quickly enough to generate sustainable revenue. Although six launches were planned for last year, only two were made. Over the life of the firm, the accumulated losses amounted to just over £1 billion, the documents showed.

This article has been changed since publication to reflect the correct value of the amount raised as a percentage of the company’s past valuation