Richard Branson’s Virgin Orbit (NASDAQ:VORB) has voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The move comes after the satellite launch company failed to raise sufficient funds to continue operating its business.
The company’s CEO, Dan Hart, said that under the current circumstances, the Chapter 11 process represents the best step to “identify and finalize an efficient and value-maximizing sale.”
VORB, which isn’t profitable, was struggling to remain afloat as it focused on ramping up operations. Earlier, on March 30, the company announced that it was reducing its workforce by approximately 85%. The move was part of the company’s plan to reduce costs after it failed to secure meaningful funding.
What is the Future of Virgin Orbit?
Virgin Orbit will continue the sale process of its business under bankruptcy protection. The company said that Virgin Investments Limited would provide it with $31.6 million through DIP (Debtor-in-Possession) financing to fund its operations and the process of selling the company.
VORB stock fell over 43% following the job cut announcement. Meanwhile, it has plunged about 89% year-to-date.
