Over: Reaction – administrators detail final months of failing company
January 8, 2025
With UK aerospace company Reaction Engines falling into administration on Halloween 2024, administrators from PricewaterhouseCoopers (PwC) have revealed more about their reasoning why, having been conducting initial assessments since June, it was deemed “not reasonably practical to rescue the Company as a going concern”.
Established in 1989 with operations split across three divisions (commercial, space and defence), Reaction Engines had also been developing the SABRE (Synergetic Air Breathing Rocket Engine); a hypersonic, precooled hybrid air-breathing rocket engine. Earlier in the year, it had successfully demonstrated the integration of its precooler technology during ground trials, achieving sustained operating conditions at Mach 3.5. Beyond its propulsion advancements, Reaction Engines was also one of 90 organisations selected earlier this year for the Ministry of Defence’s £1 billion Hypersonic Technologies & Capability Development Framework (HTCDF).
However, administrators revealed in a Companies House Filing (signed off on 23 December and published on 6 January) that, “despite securing orders and being well-positioned for new contract opportunities,” Reaction Engines would need more cash to sustain its operations beyond Q3 2024. Its most recent equity funding raise (and its single largest) was £40 million in 2023, led by the Strategic Development Fund (SDF), the investment arm of the UAE’s Tawazun Council.
Recognising that the company “struggled to transition its technologies into commercially viable applications quickly enough,” and with attempts to secure a working capital loan from existing shareholders (including BAE Systems, Boeing HorizonX Ventures and Rolls-Royce Holdings) proving unsuccessful, PwC had therefore been considering options between May and October 2024 to improve Reaction’s financial position. These included a potential merger with a US competitor specialising in thermal management technology, or a sale of the company.
As such, PwC had been developing a detailed contingency plan since May “should the sale process and fundraising efforts fail” – something which ultimately proved correct. Of Reaction Engines’ 208 employees, 172 were made redundant on 31 October, with 36 retained “to facilitate the completion of an existing order”. It is likely 34 remaining employees “will be retained for a few additional months to complete and finalise this work” before operations finally cease.
