Rocket-building company Virgin Orbit is reportedly looking for strong funding options to avoid bankruptcy, which could occur soon in case no deal is finalized. The firm has paused most of its operations and furloughed most of the staff while it seeks potential buyouts or investors.

Dan Hart, Virgin Orbit’s CEO along with other senior leaders has been holding daily discussions with potential investors, claim sources with knowledge of the matter who chose to remain anonymous.

Meanwhile, Virgin Orbit’s present workforce of around 750 employees is looking for job openings elsewhere. This includes employees ranging from executives to senior engineers. Virgin Orbit is preparing to file for a bankruptcy suit. A pair of firms, Alvarez & Marsal and Ducera Partners, have been hired to carve out a restructuring plan in the case of insolvency.

In its last mission, the company faced a midflight failure wherein the rocket failed to reach orbit. Spun out of Virgin Galactic, owned by Richard Branson, the company counts Emirati sovereign wealth fund, Mubadala among its major stakeholders. However, it has failed to sustain its cash coffers. On the other hand, its sister company has gathered a cash reserve worth USD 1 billion, through debt and stock sales.

The funds which Virgin Orbit managed to raise were contributed by Boeing and AE Industrial Partners, among other investors. It has raised around debt funding of USD 60 million from the Virgin Group’s investment arm since the fourth quarter.

Furthermore, Virgin Orbit hired Goldman Sachs and Bank of America for financial aid. George Mattson, one of the directors on Virgin Orbit’s board, has been a major proponent of selling out the company. Before becoming the founder of the SPAC called NextGen, Mattson served as a banker for over two decades at Goldman Sachs, which made Virgin Orbit public at the valuation of USD 3.7 billion.

Source Credit: https://www.cnbc.com/2023/03/20/virgin-orbit-looming-bankruptcy-deal-talks.html