WASHINGTON — A federal bankruptcy court has approved plans to conduct a sale of Virgin Orbit’s assets this month that could result in either new ownership for the launch provider or its dissolution.
During a May 1 hearing, the U.S. Bankruptcy Court for the District of Delaware approved an order setting up bidding procedures for the sale of the company’s assets. Virgin Orbit had filed for Chapter 11 bankruptcy with the court April 4.
The order sets of a swift timeline for the sale of the company. Potential bidders have until May 4 to submit non-binding indications of interest, with formal bids due May 15. If that process results in more than one qualified bid, an auction will take place May 18. A hearing on the sale is scheduled for May 24 in bankruptcy court.
That schedule is similar to what the company proposed in filings with the court last month. It sought what it called an “expedited” sale that would attract interest from both those who considered investing in the company before the Chapter 11 filings and new bidders.
“We continue to make important progress and remain focused on positioning the company to complete our sale process to the benefit of all stakeholders,” Dan Hart, chief executive of Virgin Orbit, said in a statement last month. “We remain committed to working with our investors and creditors throughout this process to achieve an optimal outcome for everyone.”
For some, like Hart, that optimal outcome would be a sale of the entire company to a new owner who would continue operations. Virgin Orbit, with a minimal staff of about 100 employees after the company laid off most of its workforce in late March, is continuing preparations for a LauncherOne return to flight later this year. The company said April 19 that it had completed the investigation into the failed LauncherOne mission in January, confirming that a dislodged fuel filter caused the rocket’s upper stage to shut down prematurely.
However, bidders could instead propose to purchase some subset of the company’s assets, like its Boeing 747 aircraft, if that maximizes the value of the deal for creditors. That would effectively break up the company.
The hearing also approved a final order for debtor-in-possession financing to keep Virgin Orbit operating at a reduced level during the Chapter 11 process. That provides the company with up to $74.1 million in loans.