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Virgin Orbit Extends Bankruptcy Auction Deadline

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Zac Aubert

Zac Aubert

Thu Jan 01 1970Written by Zac Aubert

Virgin Orbit has announced an extension of the deadline for bids as part of its bankruptcy auction process.

The company revealed that the extension was agreed upon with other major parties involved in the case, and the new deadline for final bids is set for May 19, four days later than the original deadline of May 15. The deadline for notifying bidders that their bids are considered qualified has been postponed from May 17 to May 21.

If multiple qualified bids are received for Virgin Orbit or its assets, a bankruptcy auction will be held. Originally scheduled for May 18, the auction has been rescheduled for May 22. A court hearing on the sale remains on track for May 24.

Although Virgin Orbit did not provide a specific reason for the extension, the filing stated that the bidding procedures allowed the company to extend the deadlines at its discretion and after appropriate consultation.

The bankruptcy sale plan was approved by the court on May 1. Virgin Orbit sought an expedited sale, believing it would attract interest from previous investors who considered investing in the company before its Chapter 11 bankruptcy filing on April 4, as well as new potential bidders.

On May 9, Virgin Orbit disclosed that it had received over 30 indications of interest in the company. While the identities of these parties were not revealed, Virgin Orbit acknowledged that multiple entities expressed interest in purchasing the entire company and maintaining its operations with the existing workforce.

Dan Hart, the CEO of Virgin Orbit, expressed satisfaction with the number and quality of the indications of interest received. 

Despite the bankruptcy proceedings, Virgin Orbit has maintained a minimal staff of approximately 100 employees who are continuing preparations for the next launch of its LauncherOne rocket, expected to take place later this year.

The company completed an investigation into its previous failed launch in January, determining that a dislodged fuel filter was responsible for the premature shutdown of the rocket's upper stage engine.

The successful bidder, should there be one, will need to address underlying issues that contributed to Virgin Orbit's bankruptcy. These issues include high operating costs and a low launch rate, with only two launches in both 2021 and 2022. These factors have resulted in significant operating losses and a depletion of the company's cash reserves.

It is important to note that there is no guarantee that the winning bidder will seek to continue Virgin Orbit's operations. Potential bidders may instead propose acquiring specific assets of the company, such as its Boeing 747 aircraft, if it maximizes the value of the deal for creditors.

The ultimate fate of Virgin Orbit and its employees will depend on the outcome of the bankruptcy auction and the intentions of the successful bidder.