Richard Branson's smaller space venture Virgin Orbit
Sky News reported Sunday that the commercial space satellite venture is working with two restructuring firms, Alvarez & Marsal and Ducera, as a back-up plan if the company fails to secure new funding. The news comes just days after the company paused all operations and furloughed most of its staff.
The rocket company developed a system that uses adapted Virgin Atlantic Boeing 747 jets to launch satellites into orbit by deploying a rocket from under the aircraft mid-flight. Virgin Orbit's financial troubles began after the company's failed launch in the United Kingdom back in January. In what would have been a historic launch -- being the first time satellites were sent into orbit from British soil -- the jet's fuel filter dislodged, causing the engine to overheat and resulting in the rocket booster not reaching orbit and crashing back into the Atlantic Ocean.
The mission was meant to be the start of a new era for the budding space company, but ended in a loss of nine on-board satellites and investor trust in the company. The rocket crash also led to investigations from both U.K. and United States authorities.
A Virgin Orbit spokesperson told CNBC last week that the company's investigation into the mission failure is "nearly complete," and the "next production rocket with the needed modification incorporated is in final stages of integration and test."
Still, the company seems to have been in financial trouble for some time, even before the failed rocket launch. According to Sky News sources, Branson's privately held Virgin Group has supported Virgin Orbit's operations with more than $1 billion, including $60 million since November 2022.
In its recent third-quarter earnings results reported last November, the company disclosed it had $71.2 million cash on hand as of the end of the quarter. Moreover, it made $30.9 million in revenue, and reported an adjusted EBITDA loss of $42.9 million for the period.
Virgin Orbit was spun of Virgin Galactic