Virgin Orbit Receives 30+ Indications of Interest for Sale, Lien Filed on Cosmic Girl

Virgin Orbit, the now-bankrupt launch provider, announced it has received more than 30 “indications of interest” from parties seeking to acquire part or all of the business. The group includes “multiple parties that proposed to continue to operate the business as a going concern and retain current employees in an integrated enterprise,” the company said in a press release, indicating that a Virgin Orbit sale could close in the coming weeks. Meanwhile, a lien has been placed on the company’s Boeing 747, Cosmic Girl.

“I’m pleased with the number and quality of the indications of interest we’ve received, which we believe reflects the innovative ideas and hard work the team has put into the development of this unique system,” CEO Dan Hart said in the release. “I look forward to continuing to work with those who have expressed interest and other parties as we approach the final bid deadline.”

The deadline for bids is May 15. If multiple qualifying bids are received, there will be an auction on May 18. Virgin Orbit is hoping to close a sale by no later than June 2.

Virgin Orbit wrote in its press release that it cannot guarantee that the winning bidder will continue to operate Virgin Orbit as it exists today, retain existing staff, or provide “any return to holders of the Company’s common stock.” However, Virgin Orbit is still “progressing with the final integration of the next rocket toward launch, currently planned for later this year,” the company said.

Virgin Orbit filed for bankruptcy on April 4 after laying off 675 of 775 employees. The company had been dealing with growing losses and shrinking cash reserves amid an inability to raise funding and increase its launch rate.

Lien Filed on Jetliner

Virgin Orbit uses a modified Boeing 747 jumbo jet named Cosmic Girl to air launch satellites over the ocean using the LauncherOne booster. The aircraft’s first flight was on Sept. 29, 2001, and it was delivered to Virgin Atlantic on Oct. 31, 2001. JACM Holdings Inc. acquired the aircraft on behalf of Virgin Orbit in October 2015 after the jetliner was retired from passenger service, but recent court documents indicate it could change hands yet again.

A New York aircraft maintenance company named BAR Aviation has filed a lien on Cosmic Girl in bankruptcy court saying the company owes it for more than three months of services, according to court documents. The lien could allow BAR Aviation to seize Cosmic Girl if the bills are not paid.

Specifically, BAR Aviation said that Virgin Orbit owes it $438,805.01 plus a 5 percent monthly service charge for conducting maintenance and support services on the aircraft from December 6, 2022 through March 19, 2023.

In the court documents, BAR Aviation said an invoice for $223,493.41 covering services provided from December 6 through January 22 has not been paid. The work involved preparation for a launch from Spaceport Cornwall in England on January 9 and the return of Cosmic Girl to California.

A second invoice for $215,311.60 covers January 23 through March 19. BAR Aviation conducted an A check on Cosmic Girl and preparations for Virgin Orbit’s upcoming launch. A checks are done at regular intervals depending on the aircraft and flight hours.

“The maintenance work during A checks often covers general inspections of the interior and the aircraft hull for evidence of damage, deformation, corrosion, missing parts. Additionally, it also includes service, engine, and function checks,” according to the National Aviation Academy (NAA).

BAR Aviation said it has provided support for the aircraft since October 2015. The services involved “all matters related to Cosmic Girl’s [Federal Aviation Administration] regulatory status and airworthiness, including aircraft maintenance, repairs, and other support related to flight operations.”

Most of what BAR Aviation says it is owed – $344,200 – involves labor expenses. The invoices indicated that BAR Aviation employees spent 557 days billed at a daily rate of $600 to maintain Cosmic Girl during the three-month period.

Virgin Orbit also paid for hotels, meals, transportation, and other expenses for BAR Aviation personnel who traveled to Virgin Orbit’s headquarters in California and to England to support a launch conducted in January from Spaceport Cornwall.

Two employees received bonuses of $2,500 each for staying on-site in England over the Christmas holiday as Virgin Orbit prepared for the January 9 launch, the documents say.

The invoices point to challenges unique to Virgin Orbit’s air-launch business model. Cosmic Girl serves as a reusable first stage for the two-stage LauncherOne rocket. It also gives Virgin Orbit the ability to launch from different locations around the world, eliminating the need to build, maintain, and repair fixed launch pads.

However, the maintenance and preparation of a 21-year-old jumbo jet to launch satellites require a significant investment. Virgin Orbit also paid for modifications to the aircraft, and it employs experienced pilots who are rated to fly a 747 jetliner.

Last May, Virgin Orbit signed an agreement with L3Harris Technologies to acquire and modify two Boeing 747-400s in order to expand the company’s capabilities, which stated that L3Harris would modify one aircraft to launch satellites. The company would also modify the other 747 to deliver launch vehicles and ground support equipment to foreign spaceports where Virgin Orbit planned to operate.

The fleet expansion occurred as Virgin Orbit struggled to increase its launch cadence. The company launched once in 2020, two times each in 2021 and 2022, and only once this year. Months passed with the aircraft sitting on the ramp at the Mojave Air and Space Port or Long Beach Airport in California not generating any revenue.

Virgin Orbit’s 2022 financial report showed the impact the low flight rate had on the company’s bottom line. The company reported a net loss of $191.2 million for 2022. Virgin Orbit’s total net loss for 2020 through 2022 was $470.1 million. Revenue totaled only $44.3 million for the three-year period.

In 2022, the company’s cash reserves plunged from $194 million to $51.2 million – $45 million of which had come in the form of two loans from Branson’s Virgin Investments Ltd. (VIL) in November and December. Without the cash infusion, Virgin Orbit’s reserves would have dropped down to $6.2 million.

Virgin Orbit reported $33.1 million in revenue for 2022. However, it cost the company more than twice that amount – $85.7 million – to earn the revenue.