British hypersonic aviation pioneer Reaction Engines has crashed into administration after weeks of talks with potential backers failed to result in a rescue deal.
Sky News has learned that 173 of the company’s 208 employees were made redundant on Thursday morning by PricewaterhouseCoopers (PwC), the administrators.
The collapse of a company that makes advanced engine cooling technology also threatens to create a headache for a quartet of Formula One racing teams that use engines supplied by Mercedes-Benz.
Talks to secure approximately £20 million in additional funding to keep Reaction Engines alive initially centered on the United Arab Emirates (UAE) Strategic Development Fund (SDF), the investment arm of the UAE Tawazun Council.
However, these began to unravel earlier this month, with strategic shareholders BAE Systems and Rolls-Royce Holdings unwilling to provide enough capital to rescue it.
In a statement on Thursday, Sarah O’Toole, joint administrator and partner at PwC, said: “It is with great sadness that a pioneering company with a 35-year history of leading aerospace innovation has unfortunately been unable to raise the necessary funds to continue with the operations.
”We know this is a deeply uncertain and unsettling time for the Company’s talented and dedicated employees.
“We are committed to providing you with all the support necessary at this time.”
Sky News revealed earlier this week that administrators were expected to be appointed on Thursday.
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In earlier discussions, SDF would have emerged as the largest investor in Reaction Engines, which has developed cooling technology that aims to propel aircraft at Mach 25, or 19,000 miles per hour, out of Earth’s atmosphere.
According to Reaction Engines’ most recent update to shareholders, it grew its trading revenue by more than 400% last year and is understood to have a strong pipeline of contracts and R&D opportunities.
In January last year, Reaction Engines announced that it had raised £40 million of additional capital, taking the total sum it had raised from investors to approximately £150 million.
Founded in 1989, the company is chaired by Philip Dunne, former defense minister.
”The company has been funded primarily by grants and capital raisings, given its focus on R&D,” PwC said.
” The company had been pursuing opportunities to raise more funds, but unfortunately, these attempts were unsuccessful.
” Consequently, the Directors had no choice but to place the Company into administration.
Reaction Engines’ remaining employees will be temporarily retained at its Oxfordshire headquarters “to complete a number of existing orders and support the winding down of operations”, PwC added.
