Virgin Orbit has begun drawing up detailed contingency plans for its bankruptcy day after it ceased operations and furloughed employees.
Sky News has learned that the Sir Richard BransonVirgin Group is working with two restructuring firms, Alvarez & Marsal (A&M) and Ducera, to develop a backup plan in the event fresh funding is not available.
The decision to appoint advisers underscores the severity of Virgin Orbit’s financial situation, even as it continues to negotiate with a handful of potential investors to provide enough capital to restart its operations.
Sir Richard’s holding company owns 75% of Virgin Orbit and its shares are listed on the NASDAQ exchange in New York.
Its value plummeted further after its first UK mission in Cornwall failed in January.
After listing in a $3.7bn (£3bn) deal in 2021 through a merger with a special purpose acquisition company, its listed shares are now worth just $217m (£177m).
A bankruptcy plan involving A&M and Ducera is underway outside the United States, the sources said.
A&M also laid out Virgin Atlantic’s management plan as it races to recapitalize amid the COVID-19 pandemic.
The identities of the parties interested in continuing to fund Virgin Orbit were unclear Sunday night, though one source said Boeing, which had previously invested in the company, was not in talks with it.
They added that Virgin Orbit is understood to be aiming to secure additional funding within the week.
Virgin Orbit CEO Dan Hart has been hoping to launch further missions in the coming weeks, but unless the company can secure fresh capital, that prospect is out of reach.
A Virgin Orbit spokesperson said last week: “Virgin Orbit is initiating a company-wide suspension of operations, effective 16 March 2023, and expects to provide an update on ongoing operations in the coming weeks.
“On the operational front, our investigation is nearing completion and our next production rocket with the necessary modifications is in the final stages of integration and testing.”
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Sources close to Virgin Group say Sir Richard’s private empire has backed Virgin Orbit with more than $1bn (£818bn) since November 2022, including $60m (£49m). million pounds).
An insider said the funding provided to the company was insufficient to deal with the strong headwinds and liquidity crisis it was facing.
They added that Virgin Orbit is confident it can take decisive action to protect its employees and company assets while it continues to evaluate options.
Founded in 2017, Virgin Orbit focuses on small commercial satellite launches from modified Virgin Atlantic Boeing 747 aircraft.
The company has successfully completed four missions, launching 33 satellites into orbit, according to a spokesman.
Virgin Orbit’s listing at a multi-billion dollar valuation is seen as a testament to Sir Richard’s efforts to build a lucrative business empire in space technology.
In 2019, he merged his space tourism business, Virgin Galactic, with another SPAC, Social Capital Hedosophia, in a deal that heralded a continued influx of so-called “blank check” companies.
Virgin Orbit was spun off from Virgin Galactic and was run for many years by ex-Boeing executive Mr Hart.