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Virgin Orbit, the rocket company founded by British billionaire Richard Branson in 2017, has filed for Chapter 11 bankruptcy.
The decision comes after a failed satellite launch in January, difficulties raising funding and dramatic staff reductions. The company says it will continue doing business as it searches for a buyer.
“While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business,” reads a statement from CEO Dan Hart.
California-based Virgin Orbit in January failed to complete the first satellite launch from Western Europe after a fuel feedline dislodged and caused an engine to overheat.
Two months later, Virgin Orbit paused operations amid reports that it furloughed the majority of its staff as it sought funding. The company went on to say that it would cut 675 jobs, or about 85% of its staff, to reduce expenses after failing to secure funding.
Virgin Orbit’s sister company, Virgin Investments, has committed $31.6 million in financing to help Virgin Orbit continue operations as it looks for a new owner.
The company said it is focused on a “swift conclusion” to the sales process.
What is Virgin Orbit?
The company was spun off from Branson’s Virgin Galactic in 2017.
The company launched commercial services in 2021 and has delivered commercial, civil, national security and international satellites into orbit, according to its website. Its LauncherOne rockets are launched from modified airplanes.
Who owns Virgin Orbit?
Virgin Orbit is part of Branson’s multinational conglomerate Virgin Group, along with Virgin Hotels, Virgin Atlantic, Virgin Mobile, Virgin Voyages and others.
Virgin Orbit stock price
Virgin Orbit, was trading at $0.15 as of 12:19 p.m. Eastern Tuesday on the Nasdaq, down 21.8% from the previous day and down 91.53% year to date.
You can follow USA TODAY reporter Bailey Schulz on Twitter @bailey_schulz and subscribe to our free Daily Money newsletter here for personal finance tips and business news every Monday through Friday.
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