Capital crunch: Virgin Orbit confirms all ops on pause until Tuesday
(2023/03/16)
- Reference: 1678966456
- News link: https://www.theregister.co.uk/2023/03/16/virgin_orbit/
- Source link:
Virgin Orbit has hit the pause button on the business to "conserve capital" while it seeks funding and explores strategic opportunities.
The rocket-building biz, which only began commercial launch operations in 2021, said this morning in an [1]SEC filing it was in "discussions with potential funding sources" and looking at strategy although it made "no assurance" the discussions would result in any transaction. Virgin Orbit currently expects the operational pause to continue through March 21, 2023. That's Tuesday next week.
Sources from the company told [2]CNBC last night that it was furloughing nearly all its employees, with only some key crew members remaining. According to the sources, it's an unpaid furlough, though employees can cash in paid leave, and the company will shift up payroll by a week to Friday.
[3]
The company has yet to respond to those claims.
[4]
[5]
The Virgin Galactic spinout's first satellite launch from the UK failed spectacularly earlier this month when its modified 747, nicknamed "Cosmic Girl", took off from Cornwall, flew west over the Atlantic Ocean to an altitude of 35,000 feet, and let loose the Launcher One, a rocket designed to place nine satellites into orbit. While Launcher One did leave Earth's atmosphere, it never made it to orbit. Cosmic Girl remains in one piece.
The payload was a mix of civil and military satellites and while the exact financial impact of their failure to deploy is unknown, it will have been significant.
[6]
In an [7]SEC filing this morning, Virgin Orbit said it was "initiating a company-wide operational pause, effective March 16, 2023, and anticipates providing an update on go-forward operations in the coming weeks."
UK space faces cash freeze unless watchdogs step up [8]READ MORE
In its reported Q3 results for three months ended September 30, 2022, the company said it had $71.2 million in cash at the end of the quarter, down from the $1.194 billion in the same quarter in 2021. It noted in the [9]10-K filing [PDF] at the time that "since inception, our operations have consumed substantial amounts of cash, which was funded primarily through cash flows financed by our previous corporate parent, Vieco 10" until the December 29, 2021 transaction making the biz a public company."
Virgin Orbit's net losses were $139.5 million and $115.6 million for the nine months ended September 30, 2022 and 2021 respectively, and it warned it could not be sure "when or if our operations will generate sufficient cash to fully fund our ongoing operations."
[10]First-ever orbital satellite launch from British soil will be delayed
[11]Virgin Orbit doesn't
[12]Psst... Wanna buy some stock in a spaceplane company? Virgin would like a word
[13]Gone in 9 seconds: Virgin Orbit's maiden rocket flight went perfectly until it didn't
Earlier this month, at a Parliamentary Science and Technology Committee meeting, the UK's Civil Aviation Authority (CAA) and other regulators were blasted for being partly responsible for making the space industry a "toxic" environment for investment. Joshua Western, CEO of Space Forge, the Welsh satellite maker whose hardware missed orbit in the [14]failed Virgin Orbit launch from Cornwall in January , claimed regulatory delays – and not tech failures – were the true threat for the UK commercial space launch industry.
Western told the committee at the time that "jarring" interactions with the CAA meant it cost more to license satellites in the UK than it did to launch them.
Patrick McCall, Space Forge's non-executive director, meanwhile, added that for the UK to win back investor confidence it needed two or three customers from the public sector to show "unnecessary regulatory difficulties" would not delay launches.
The UK's space regulator has denied that its procedures [15]dragged back launch dates for Virgin Orbit before the failed launch on March 2.
[16]
The UK's Space Accident Investigation Authority (SAIA) and the Federal Aviation Administration (FAA) in the US are jointly overseeing the Virgin Orbit investigation into the system anomaly that occurred during the firing of the rocket's second stage engine.
We have asked Virgin Orbit for further comment. ®
Get our [17]Tech Resources
[1] https://www.sec.gov/ix?doc=/Archives/edgar/data/1843388/000184338823000026/vorb-20230315.htm
[2] https://www.cnbc.com/2023/03/15/virgin-orbit-pauses-operations-furloughs-staff.html
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZBNLL6nwE18@dZVEur4QEAAAAME&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[7] https://www.sec.gov/ix?doc=/Archives/edgar/data/1843388/000184338823000026/vorb-20230315.htm
[8] https://www.theregister.com/2023/03/02/uk_space_investment/
[9] https://investors.virginorbit.com/sec-filings/all-sec-filings/content/0001628280-22-028974/0001628280-22-028974.pdf
[10] https://www.theregister.com/2022/12/09/firstever_orbital_satellite_launch_from/
[11] https://www.theregister.com/2023/01/10/virgin_orbit_doesnt/
[12] https://www.theregister.com/2020/05/12/space_round_up/
[13] https://www.theregister.com/2020/05/27/virgin_orbit_postmortem/
[14] https://www.theregister.com/2023/01/10/virgin_orbit_doesnt/
[15] https://www.theregister.com/2023/03/02/uk_space_investment/
[16] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZBNLL6nwE18@dZVEur4QEAAAAME&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[17] https://whitepapers.theregister.com/
The rocket-building biz, which only began commercial launch operations in 2021, said this morning in an [1]SEC filing it was in "discussions with potential funding sources" and looking at strategy although it made "no assurance" the discussions would result in any transaction. Virgin Orbit currently expects the operational pause to continue through March 21, 2023. That's Tuesday next week.
Sources from the company told [2]CNBC last night that it was furloughing nearly all its employees, with only some key crew members remaining. According to the sources, it's an unpaid furlough, though employees can cash in paid leave, and the company will shift up payroll by a week to Friday.
[3]
The company has yet to respond to those claims.
[4]
[5]
The Virgin Galactic spinout's first satellite launch from the UK failed spectacularly earlier this month when its modified 747, nicknamed "Cosmic Girl", took off from Cornwall, flew west over the Atlantic Ocean to an altitude of 35,000 feet, and let loose the Launcher One, a rocket designed to place nine satellites into orbit. While Launcher One did leave Earth's atmosphere, it never made it to orbit. Cosmic Girl remains in one piece.
The payload was a mix of civil and military satellites and while the exact financial impact of their failure to deploy is unknown, it will have been significant.
[6]
In an [7]SEC filing this morning, Virgin Orbit said it was "initiating a company-wide operational pause, effective March 16, 2023, and anticipates providing an update on go-forward operations in the coming weeks."
UK space faces cash freeze unless watchdogs step up [8]READ MORE
In its reported Q3 results for three months ended September 30, 2022, the company said it had $71.2 million in cash at the end of the quarter, down from the $1.194 billion in the same quarter in 2021. It noted in the [9]10-K filing [PDF] at the time that "since inception, our operations have consumed substantial amounts of cash, which was funded primarily through cash flows financed by our previous corporate parent, Vieco 10" until the December 29, 2021 transaction making the biz a public company."
Virgin Orbit's net losses were $139.5 million and $115.6 million for the nine months ended September 30, 2022 and 2021 respectively, and it warned it could not be sure "when or if our operations will generate sufficient cash to fully fund our ongoing operations."
[10]First-ever orbital satellite launch from British soil will be delayed
[11]Virgin Orbit doesn't
[12]Psst... Wanna buy some stock in a spaceplane company? Virgin would like a word
[13]Gone in 9 seconds: Virgin Orbit's maiden rocket flight went perfectly until it didn't
Earlier this month, at a Parliamentary Science and Technology Committee meeting, the UK's Civil Aviation Authority (CAA) and other regulators were blasted for being partly responsible for making the space industry a "toxic" environment for investment. Joshua Western, CEO of Space Forge, the Welsh satellite maker whose hardware missed orbit in the [14]failed Virgin Orbit launch from Cornwall in January , claimed regulatory delays – and not tech failures – were the true threat for the UK commercial space launch industry.
Western told the committee at the time that "jarring" interactions with the CAA meant it cost more to license satellites in the UK than it did to launch them.
Patrick McCall, Space Forge's non-executive director, meanwhile, added that for the UK to win back investor confidence it needed two or three customers from the public sector to show "unnecessary regulatory difficulties" would not delay launches.
The UK's space regulator has denied that its procedures [15]dragged back launch dates for Virgin Orbit before the failed launch on March 2.
[16]
The UK's Space Accident Investigation Authority (SAIA) and the Federal Aviation Administration (FAA) in the US are jointly overseeing the Virgin Orbit investigation into the system anomaly that occurred during the firing of the rocket's second stage engine.
We have asked Virgin Orbit for further comment. ®
Get our [17]Tech Resources
[1] https://www.sec.gov/ix?doc=/Archives/edgar/data/1843388/000184338823000026/vorb-20230315.htm
[2] https://www.cnbc.com/2023/03/15/virgin-orbit-pauses-operations-furloughs-staff.html
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZBNLL6nwE18@dZVEur4QEAAAAME&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZBNLL6nwE18@dZVEur4QEAAAAME&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZBNLL6nwE18@dZVEur4QEAAAAME&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.sec.gov/ix?doc=/Archives/edgar/data/1843388/000184338823000026/vorb-20230315.htm
[8] https://www.theregister.com/2023/03/02/uk_space_investment/
[9] https://investors.virginorbit.com/sec-filings/all-sec-filings/content/0001628280-22-028974/0001628280-22-028974.pdf
[10] https://www.theregister.com/2022/12/09/firstever_orbital_satellite_launch_from/
[11] https://www.theregister.com/2023/01/10/virgin_orbit_doesnt/
[12] https://www.theregister.com/2020/05/12/space_round_up/
[13] https://www.theregister.com/2020/05/27/virgin_orbit_postmortem/
[14] https://www.theregister.com/2023/01/10/virgin_orbit_doesnt/
[15] https://www.theregister.com/2023/03/02/uk_space_investment/
[16] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/science&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZBNLL6nwE18@dZVEur4QEAAAAME&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[17] https://whitepapers.theregister.com/
Re: Thoughts
zuckzuckgo
I guess achieving orbit from the UK is just a tough cherry to pop.
Re: Thoughts
werdsmith
It's a US rocket that attempted to begin its journey to orbit from a UK runway.
In other words, launching the zero stage from Cornwall was just a stunt.
Black Arrow was a British rocket that achieved orbit from an Australian launch site. That was a genuine effort by Westland and others.
Virgin
Anonymous Coward
Obit?
Re: Virgin
simonlb
I find it hard to find any sympathy for this seeing as that bastard Branson sued the NHS for one of his companies losing a healthcare contract.
Johnson Booster is damp squib.
Antony Shepherd
I guess Grant Shapps is busy photoshopping himself out of the same photo he previous had Johnson photoshopped out of. So much for 'Galactic Britain'!
Martin Summers
Let's face it, this will never take off.
Thoughts
Did regulatory delays cause the launch to fail ?
No.
Did launch fail cost Virgin Orbit income?
Probably
Were they leaking money like no tomorrow anyway?
Possibly
Did regulatory delays cause Virgin Orbit's cash flow to become marginal
Possibly
Was the recent launch all about putting on a "good show " in front of Brits to get funding
?