Virgin Orbit commences Chapter 11 proceeding to effectuate sale

Virgin Orbit announced that it commenced a voluntary proceeding under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court in the District of Delaware in order to effectuate a sale of the business. With the support of Virgin Investments in the form of debtor-in-possession, or DIP, financing, Virgin Orbit intends to use the Chapter 11 process to maximize value for its business and assets. This announcement follows 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. To help fund the process and protect its operations, the company has received a commitment from Virgin Investments for $31.6M in new money DIP financing. Upon approval from the Bankruptcy Court, the DIP financing is expected to provide Virgin Orbit with the necessary liquidity to continue operating as it furthers the marketing process commenced pre-petition to sell the company. The company said it is focused on a swift conclusion to its sale process in order to provide clarity on the future of the company to its customers, vendors, and employees. In the interim, Virgin Orbit will continue operating in the ordinary course as a "debtor-in-possession" under the jurisdiction of the bankruptcy court and in accordance with the applicable provisions of the U.S. Bankruptcy Code. Virgin Orbit has filed customary motions requesting that the Court authorize the company’s ability to its use cash on hand and access the DIP financing to support this process, including payment of remaining employee wages and benefits without interruption. The company intends to pay suppliers and vendors to the fullest extent possible pursuant to normal terms for goods and services provided on or after the filing date. The company is also committed to working with its customers as it tries to find a buyer that will be able to continue to fulfill their needs.