A company seeking to make hypersonic flight a reality has crashed into administration.
Reaction Engines, based in Abingdon, Oxfordshire, had sought a rescue deal but 173 of its 208-strong workforce have now been made redundant by administrator PwC, according to Sky News.
The company had needed around £20 million in additional funding to keep going, with the UAE’s Strategic Development Fund a potential backer; but when those talks faltered earlier this month, strategic shareholders BAE Systems and Rolls-Royce Holdings were left unwilling to bail it out.
Reaction Engines was founded in 1989 by three propulsion engineers from Rolls Royce. It has developed a Synergetic Air Breathing Rocket Engine – SABRE – which contains precooler technology able to deal with extreme temperatures found at incredibly high speeds.
Chaired by Philip Dunne, a former defence minister, the company has been led since 2015 by Mark Thomas, who joined following a 25-year career at Rolls Royce and moved its focus from pure research and development to industry sponsorship.
Thomas told BusinessCloud in 2020: “We’re looking beyond the next Concorde… we’re looking to go hypersonic – which is more than double the speed again. And that’s a completely different threat domain.”
The company had worked with the UK Space Agency and European Space Agency, with the UK government investing £60m in SABRE as part of a ‘strategic approach to space’. The idea was that propulsion tech could make space access far easier and more affordable.
Early last year it raised £40m of additional equity, taking its total funding to £150m. Shareholders include BAE Systems and Rolls-Royce Holdings.
However fund managers Artemis Alpha Trust plc and Schroders Capital Global Innovation Trust recently took the decision to write down the value of their holdings, which saw the valuation of the entire company fall from £256m to £33.8m two months ago.
Reaction Engines sought to raise further investment via an internally-led fundraise at a discount to the last valuation, but was unsuccessful.
Reaction Engines grew its commercial revenues by more than 400% last year and was reported to have a strong pipeline of contract and R&D opportunities, including military aircraft, hydrogen-powered commercial flight and heat pumps prior to the administration.
Sarah O’Toole, joint administrator and partner at PwC, said: “It’s with great sadness that a pioneering company with a 35-year history of spearheading aerospace innovation has unfortunately been unable to raise the funding required to continue operations.
“We know this is a deeply uncertain and unsettling time for the Company’s talented and dedicated employees.
“We are committed to providing them with all the necessary support at this time.”
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