Bankrupt missile company Virgin Orbit received a $17 million “stalking horse” bid for its modified 747 aircraft carrier and other aircraft assets as it continues to explore options during Chapter 11 litigation.
Virgin Orbit agreed to the terms of the potential aircraft deal from aerospace company Stratolaunch, which is developing the world’s largest aircraft dubbed “Roc” as an airborne platform for hypersonic test flights. A stalking horse bid represents the initial foray into a bankrupt company’s assets and effectively sets the minimum bid for any competing offers.
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According to bankruptcy filings released Tuesday, the Stalking Horse agreement followed “hard-fought negotiations” between the companies. The deal would see Stratolaunch purchase Virgin Orbit’s aircraft assets for cash, with a $1.7 million deposit to be immediately deposited by the buyer if the deal goes through.
Virgin Orbit filed for bankruptcy protection on April 4 after the company failed to secure a financial lifeline and laid off almost all of its workforce.
“Stratolaunch is constantly evaluating how we can increase our capacity to meet customer demand while ensuring our country has the ability to accelerate hypersonic technology through flight demonstrations in leaps and bounds,” the company said in a statement.
Stratolaunch is owned by Cerberus Capital Management — which bought the company from Vulcan in 2019 from the late Microsoft co-founder Paul Allen.
Cerberus previously tried to take Richard Branson’s ailing rocket company private and was one of the closest potential bidders to a deal, but ultimately declined, according to a person familiar with the late stages of Virgin Orbit’s attempts to file for bankruptcy. prevent.
Cerberus representatives did not respond to CNBC requests for comment on the private discussions. A Virgin Orbit spokesperson declined to comment on the potential Cerberus deal, but said in a statement that the company is “pleased that the number and quality of indications of interest reflect the innovative ideas and hard work the team has invested in the development of this unique system.”
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Virgin Orbit previously announced it had received “more than 30 indications of interest” during the bankruptcy process, with the company continuing to look for a wholesale deal.
A bankruptcy auction is scheduled for Monday, with a hearing scheduled for 2 p.m. ET on May 24 to approve the results.
Stratolaunch, the world’s largest aircraft, lands at California’s Mojave Air and Space Port after its first successful flight on April 13, 2019.