March 4, 2024

Here's what led to Virgin Orbit's bankruptcy

Bankrupt rocket company Virgin Orbit has received a $17 million “track horse” bid for its converted 747 carrier jet and other aircraft assets as it continues to review options during its Chapter 11 court proceedings.

Virgin Orbit has agreed to the terms of a potential aircraft deal with aerospace firm Stratolaunch, which is developing the world’s largest aircraft called “Roc” as an airborne platform for hypersonic flight tests. The stalker bid represents the first foray into the assets of the bankrupt company and effectively sets the minimum bid for any potential competing bids.

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The horse-stalking agreement came after “hard negotiations” between the two companies, according to the bankruptcy filing released Tuesday. The deal will see Stratolaunch purchase Virgin Orbit’s aircraft assets for cash, with the buyer immediately paying a $1.7 million deposit in escrow if the deal closes.

On April 4, Virgin Orbit filed for bankruptcy protection after failing to secure funding and laying off nearly all of its employees.

“Stratolaunch is constantly evaluating how we can improve our capabilities to meet customer needs while ensuring our nation has the capability to accelerate hypersonic technology through leapfrog flight demonstrations,” the company said in a statement.

Stratolaunch is owned by Cerberus Capital Management, which acquired the company in 2019 from late Microsoft co-founder Paul Allen’s Vulcan.

Cerberus had previously considered taking Richard Branson’s troubled rocket company private and was one of several potential bidders closest to a deal, according to a person familiar with Virgin Orbit’s late-stage attempt to stave off bankruptcy. , but ultimately rejected it.

Representatives for Cerberus did not respond to CNBC’s request for comment on the privatization discussions. A Virgin Orbit spokesperson declined to comment on the potential Cerberus deal, but said in a statement that the company is “pleased that the number and quality of indications of interest reflect the innovative ideas and hard work the team has put into developing this project.” Unique system.”

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Virgin Orbit previously revealed it had received “more than 30 expressions of interest” in its insolvency proceedings as it continued to pursue wholesale deals.

The bankruptcy auction is scheduled for Monday, with a court hearing scheduled for May 24 at 2 p.m. ET to approve the auction results.

On April 13, 2019, the world’s largest aircraft, Stratolaunch, landed at the Mojave Air and Space Port in California after its first successful flight.