British Concorde successor on brink of collapse

Reaction Engines poised to appoint administrators after rescue talks fail

A British aviation company billed as a successor to Concorde has collapsed into administration after last-ditch attempts to secure a rescue deal fell through.
Reaction Engines, which is developing a hybrid rocket engine aimed at enabling hypersonic travel, filed a notice of intention to appoint administrators on Thursday. 
Restructuring experts from PwC have been appointed to handle the administration. A spokesman for Reaction Engines declined to comment.
PwC said Reaction Engines had been “pursuing opportunities to raise further funds, but unfortunately, these attempts were unsuccessful”. It added that 173 of the company’s 208 staff had been made redundant.
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.”
The Oxfordshire company had been locked in talks with shareholders, including the UAE’s Strategic Development Fund, for a cash lifeline.
Reaction Engines was developing a hybrid jet and rocket engine, called Sabre, which could enable hypersonic space planes to fly from Britain to Australia in as little as four hours.
Originally founded in 1989, Reaction’s Sabre technology – which is short for Synergetic Air Breathing Rocket Engine – can work like a normal jet engine before switching to rocket fuel when it reaches high altitude. Its technology led some to anoint it the heir to Concorde.
However, the company has struggled to commercialise its invention. 
Investors previously wrote down the value of their stakes in Reaction Engines, which had once plotted a £1bn initial public offering, by as much as 87pc as hopes of a bailout faded.
The business has secured investment from Rolls Royce and BAE Systems, as well as multiple government grants. However, it also burned through tens of millions of pounds a year.
In August, Schroders, an investor in Reaction Engines, warned: “Despite steps to commercialise its heat-exchanger technology and recent contract awards, revenue growth at Reaction Engines has been slower than management anticipated, and the company will require further investment and time to become cash positive.”
Sky News previously reported that Rolls Royce and BAE Systems were unwilling to inject further business into the company and that restructuring experts from PwC had been lined up for a possible administration.
The company raised £40m from investors last year, including backers from the UAE, bringing its total funding to more than £150m.
According to the most recently published accounts, Reaction’s annual losses in 2022 widened from £18.4m to £25.7m, while revenues fell from £7.2m to £4.7m.