Virgin Orbit Auctions Assets to Space 3D Printing Ventures
If there were any indications that Virgin Orbit could be kept operating as a single entity after going bankrupt, they have been crushed. Following a comprehensive sale process and competitive auction, the company announced that it has decided to sell its assets to four winning bidders, including Rocket Lab (Nasdaq: RKLB), Vast, and Stratolaunch, and will cease operations. The final sale hearing is scheduled for today, with the transactions expected to close shortly thereafter.
The following company statement highlights the impact that the firm’s rockets had on the new space race and the team that worked to drive its mission:
On April 4, 2023, Virgin Orbit filed for Chapter 11 bankruptcy and is currently undergoing a sale. This shocking announcement followed the company’s previous statement about reducing its workforce due to an inability to raise sufficient out-of-court capital to continue operating its business at the current run rate. Adding to its list of woes, the bankruptcy comes on the heels of the mission failure of LauncherOne, Virgin Orbit’s rocket designed to fly small satellites into orbit.
Upon announcing the filing for Chapter 11 bankruptcy, CEO Dan Hart emphasized the team’s achievement in developing and implementing a groundbreaking approach to satellite launches. LauncherOne was designed for air launch from a modified Boeing 747 jet known as Cosmic Girl and introduced numerous advantages compared to conventional rocket launches. These advantages include fuel savings, flexibility in site selection, and the ability to bypass weather-related delays.
To maximize the value of its assets during the bankruptcy process, Virgin Orbit secured $31.6 million in new money debtor-in-possession financing from Virgin Investments Limited. This financing was obtained to support the ongoing sale process.
Recent court filings reveal that Rocket Lab has acquired Virgin Orbit’s primary production facility in Long Beach, California, for $16.1 million. The acquisition includes various assets, such as 3D printers and a specialty tank welding machine. Virgin Orbit had equipped its Long Beach facility with advanced manufacturing capabilities, including a laser metal deposition Lasertec 4300 3D printer by DMG Mori. This state-of-the-art printer utilizes fused metal powder to add and subtract material, enabling the production of rocket parts, including components for the LauncherOne system. Rocket Lab intends to leverage these resources to expedite the manufacturing of rocket parts, including rocket engine components.
Rocket Lab plans to leverage Virgin Orbit’s Long Beach facilities and crucial manufacturing infrastructure to expedite the production of its Neutron rocket. The successful bid encompasses the lease for Virgin Orbit’s expansive 144,000-square-foot headquarters and manufacturing complex located at 4022 E. Conant St. in Long Beach, along with all associated production assets, machinery, and equipment.
The combination of these assets with Rocket Lab’s existing production, manufacturing, and testing capabilities is expected to enhance the Neutron rocket’s production significantly. It’s important to note that Rocket Lab clarified that it would not integrate Virgin Orbit’s launch system into its existing launch services, indicating a separation between the two companies offerings.
Stratolaunch submitted a $17 million “stalking horse” bid for the Boeing 747 and related equipment. This comes as no surprise since the business has already developed a massive aircraft, the Stratolaunch Carrier, which has the largest wingspan of any aircraft ever built and aims to air-launch space transportation. In another bid, rocket engine and spacecraft startup Launcher, which was acquired by developer Vast last February, bought the lease on a testing site in California’s Mojave Desert with machinery, equipment, and inventory there for $2.7 million.
According to filings with the federal bankruptcy court, Virgin Orbit claims the combined total proceeds were determined by a rigorous and competitive auction that maximizes the estate’s value and minimizes the remaining duration of the company’s restructuring.
Virgin Orbit, primarily owned by Richard Branson’s Virgin Group, has traded on the Nasdaq exchange under the ticker symbol VORBQ since 2021. However, due to the Chapter 11 process, Nasdaq announced it was launching delisting proceedings, insisting that the company was “not compliant” with listing rules since it still hadn’t filed its annual results for 2022. As a result, Nasdaq informed the company that its stock would be suspended on April 13, 2023, and even though Virgin Orbit said it intended to appeal Nasdaq’s decision to delist, it will not impact the upcoming suspension. As a result of the delisting, Virgin Orbit’s shares fell 22% in premarket trading at 13 cents and continued plunging days after.
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May 24, 2023 at 09:00AM
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