WASHINGTON — Launch vehicle company Virgin Orbit has suspended operations and given its staff at least a week’s leave due to financial problems.
In a statement late March 15, the company said it was placing an “operational pause” for the entire company, including furloughed staff. CNBC first reported on the shutdown of its operations.
“Virgin Orbit is entering a company-wide operational hiatus, effective March 16, 2023, and expects to provide an update on future operations in the coming weeks,” a company spokesperson told SpaceNews.
A company source, speaking in the background, said employees were told to expect an update on the company’s future plans in about a week, given what was described as a cash flow problem.
Virgin Orbit suffered a technical setback on January 9 when the first LauncherOne mission from the United Kingdom failed to reach orbit. That failure, which came after four consecutive successes of the air launch system, is linked to a filter in a fuel line in the fuel of the rocket’s upper stage becoming detached, leading to a failure of the stage’s motor and preventing it from operating. orbit around the Earth.
The company said on March 15 that the investigation into that malfunction is “close to completion and our next production rocket with the necessary modification is in the final stages of integration and testing.”
Virgin Orbit also faced financial challenges. In its latest quarterly report of November 2022, it reported $71 million in cash at the end of the third quarter, with an operating loss of $50.5 million that quarter. The company has not released any updated financial results or announced a schedule to do so since then.
The company has raised $60 million in four tranches from Virgin Investments Limited (VIL) since November, all in the form of loans with interest rates as high as 12%. The most recent funding, $5 million, came on Feb. 28. The loans are backed by Virgin Orbit’s assets, leading VIL to give “first priority safety interest” to those assets, including its Boeing 747 aircraft.
The company has said little about those loans publicly, other than confirming statements in Securities and Exchange Commission filings that the money would go to working capital.
Virgin Orbit was scheduled to appear on a panel at the Satellite 2023 conference here on March 14 on the topic of smallsats launch options. The company did not appear and the panel organizers gave no explanation for the company’s absence.