Time runs out for Reaction Engines as the British aerospace innovator enters administration
October 31, 2024
British aerospace engineering company Reaction Engines which is behind the development of the Synergetic Air Breathing Rocket Engine (SABRE) has entered administration after rescue talks with potential investors failed.
PricewaterhouseCoopers (PwC) has been appointed as the administrator with 173 of the company’s 208 staff made redundant on Thursday 31 October, according to a report on Sky News.
The report revealed that efforts to secure a financial lifeline initially focused on raising approximately £20 million from the UAE’s Strategic Development Fund (SDF), the investment arm of the UAE’s Tawazun Council. However, after weeks of discussions, negotiations with SDF fell through, primarily due to insufficient backing from existing shareholders, including BAE Systems and Rolls-Royce Holdings, who were reluctant to inject additional capital.
This setback follows an earlier £40 million investment round completed in 2023, bringing Reaction Engines’ total funding to more than £150 million. However, in August of this year Schroders, another of Reaction Engines’ investors, warned that the company’s revenue growth was slower than management anticipated and additional funding would be essential to sustain operations.
The company had been dubbed a successor to Concorde with its versatile propulsion system intended to propel an aircraft from zero to five times the speed of sound (Mach 5) in the atmosphere and 25 times the speed of sound (Mach 25) for space access.
Earlier this year Reaction Engines achieved a “ground-breaking” milestone in hypersonic propulsion, when it successfully demonstrated the integration of its innovative precooler technology with existing jet-engine architecture. During ground trials, a modified Rolls-Royce jet engine achieved sustained operating conditions at Mach 3.5, a critical step in developing SABRE’s feasibility for high-Mach/ hypersonic aircraft, according to the company.
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). Established to accelerate the UK’s development of advanced hypersonic missile systems, this framework underlined Reaction Engines’ central role in the UK’s strategic hypersonic capabilities.
Commenting on the company’s administration, Sarah O’Toole, joint administrator and PwC partner expressed her 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.”
PwC is now liaising with creditors, suppliers and employees to assess the company’s assets and liabilities and determine the most effective strategy for settling the company’s obligations.
