Virgin Orbit auctions $36 million in remaining assets as company folds

By Joey Roulette

WASHINGTON (Reuters) -Richard Branson's bankrupt satellite launch firm, Virgin Orbit, on Tuesday revealed that it was closing for good after a $36.4 million asset sale, including an agreement to sell the bulk of its Long Beach, California, headquarters to small-launch firm Rocket Lab USA Inc.

Rocket Lab, the seasoned small-rocket company whose headquarters is less than a mile from Virgin Orbit's, won the bankrupt rocket company's primary manufacturing site for $16 million during an auction held on Monday, according to a court filing disclosing the results of a weeks-long Chapter 11 bid process.

The purchase agreement includes machinery and equipment that had been used to manufacture Virgin Orbit's flagship LauncherOne rockets, which air-launched from the belly of a modified Boeing 747. It is subject to the bankruptcy court's approval during a hearing scheduled for Wednesday.

In a statement thanking its employees, investors and other stakeholders, Virgin Orbit said it will sell its assets to a total of four winning bidders and cease operations.

"The combined total proceeds were determined by a rigorous and competitive auction which maximizes value for the estate and minimizes the remaining duration of the Company’s restructuring," the statement said. "Virgin Orbit's legacy in the space industry will forever be remembered."

Founded by billionaire Branson to send small satellites into space, Virgin Orbit laid off 85% of its some 750 employees in March and filed for Chapter 11 bankruptcy protection in early April after the company struggled to secure long-term funding following a failed launch from Britain in January.

Most of the roughly 100 employees who remained at the company through the bankruptcy proceedings will be laid off within the next week, a person familiar with the company's final plans said.

Virgin Orbit also plans to sell its aircraft assets, including the modified Boeing 747 "Cosmic Girl" carrier aircraft, to hypersonics firm Stratolaunch for $17 million, the filing said. Stratolaunch had been a designated stalking horse bidder for those assets earlier in May.

Virgin Orbit's primary launch site in California's Mojave Desert will be sold to rocket engine and spacecraft startup Launcher Inc. A spokeswoman for Vast Space, a space station firm backed by cryptocurrency billionaire Jed McCaleb that acquired Launcher earlier this year, declined to comment because the deal has not yet closed.

This month, Virgin Orbit said it had received more than 30 letters of interest from prospective bidders for its assets, a higher amount than the company expected, a person familiar with the process told Reuters at the time.

Tuesday's filing said Virgin Orbit decided "not to continue the Auction" regarding the company's inventory of LauncherOne rocket engines, the core of its launch business.

"No Successful Bidder or Next-Highest Bidder has been selected for such Assets at this time," the filing said. Discussions on what to do with the rocket engines are ongoing, a spokeswoman said.

(Reporting by Joey Roulette in WashingtonEditing by Leslie Adler, Matthew Lewis and David Gregorio)