Updated March 16 with SEC filing.
WASHINGTON — Launch vehicle company Virgin Orbit has paused its operations and furloughed its staff for at least a week as it deals with financial issues.
In a statement late March 15, the company said it was instituting an “operational pause” across the company, which includes furloughing staff. CNBC first reported on the halt in its operations.
“Virgin Orbit is initiating a company-wide operational pause, effective March 16, 2023, and anticipates providing an update on go-forward operations in the coming weeks,” a company spokesperson told SpaceNews.
A company source, speaking on background, said employees were told to expect an update in about a week on the company’s future plans as it deals with what was described as a cash flow issue.
In a filing with the Securities and Exchange Commission March 16, Virgin Orbit said it expected the operational pause to continue to March 21 as it “conducts discussions with potential funding sources and explores strategic opportunities.” The company added that there is “no assurance that these discussions will result in any transaction.”
Virgin Orbit suffered a technical setback Jan. 9 when its first LauncherOne mission from the United Kingdom failed to reach orbit. That failure, which came after four consecutive successes of the air-launch system, has been linked to a filter in a fuel line in rocket’s upper stage fuel that dislodged, leading to a malfunction of the stage’s engine and preventing it from reaching orbit.
The company said March 15 that the investigation into that failure “is nearly complete and our next production rocket with the needed modification incorporated is in final stages of integration and test.”
Virgin Orbit was also facing financial challenges. In its last quarterly earnings report in November 2022, it reported $71 million of cash on hand as of the end of the third quarter, with an operating loss of $50.5 million that quarter. The company has not released updated financial results since then or announced a schedule for doing so.
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 Feb. 28. The loans are secured by Virgin Orbit’s assets, giving VIL “first-priority security interest” to those assets, including its Boeing 747 aircraft.
The company has said little publicly about those loans, other than confirming statements in the Securities and Exchange Commission filings that the funds would go towards working capital.
Virgin Orbit was scheduled to appear on a panel March 14 at the Satellite 2023 conference here on the topic of launch options for smallsats. The company did not appear and panel organizers did not explain the company’s absence.
