Bankrupt take off company Virgin Orbit received a $17 million “stalking horse” bid for its modified 747 carrier jet and other aircraft assets, as it persevere ins to examine options during Chapter 11 court proceedings.
Virgin Orbit agreed to the terms of the potential aircraft practise from aerospace venture Stratolaunch, which is developing the world’s largest airplane called “Roc” as an airborne platform for hypersonic exit testing. A stalking horse bid represents the first foray on assets of a bankrupt company, and effectively sets the minimum bid for any developing competing offers.
According to bankruptcy filings released Tuesday, the stalking horse agreement followed “hard-fought pacts” between the companies. The deal would see Stratolaunch buy Virgin Orbit’s aircraft assets for cash, with a $1.7 million set to be made by the buyer immediately in escrow if the deal goes through.
Virgin Orbit filed for bankruptcy protection on April 4 after the Pty failed to secure a funding lifeline and laid off nearly its entire workforce.
“Stratolaunch continually evaluates how to increase our position to meet the customer demand while ensuring our country has the capability to accelerate hypersonic technology via leap-ahead flight parades,” the company said in a statement.
Stratolaunch is owned by Cerberus Capital Management – which bought the company from the till Microsoft co-founder Paul Allen’s Vulcan in 2019.
Cerberus previously looked to take Richard Branson’s distressed shoot up company private, and was among the closest of several potential bidders to striking a deal, but ultimately balked, according to a mortal physically familiar with the late stages of Virgin Orbit’s attempts to avoid bankruptcy.
Representatives for Cerberus did not respond to CNBC petitions for comment on the take-private discussions. A Virgin Orbit spokesperson declined to comment on the potential Cerberus deal, but said in a proclamation that the company is “pleased that the numbers and quality of the indications of interest reflect the innovative ideas and hard assignment the team has put into the development of this unique system.”
Sign up here to receive weekly editions of CNBC’s Inducting in Space newsletter.
Virgin Orbit previously disclosed that it received “over 30 indications of interest” during its bankruptcy technique, with the company continuing to look for a wholesale deal.
A bankruptcy auction is set for Monday, with a court hearing organized for 2 p.m. ET on May 24 to approve the results.
Stratolaunch, the world’s largest airplane, lands at the Mojave Air and Space Port in California after its start successful flight on April 13, 2019.
Stratolaunch