Reaction Engines, the British leader in hypersonic aviation, has moved to reassure staff that they will be paid this month as talks to save the company continue.
Staff at Reaction Engines were told this week that it would meet its October payroll obligations amid growing doubts about its survival, Sky News has learned.
The company has been in talks for weeks about a deal to secure around £20m of additional funding.
However, the prospects for a successful capital raise appeared to have dimmed at the end of the week when it emerged that negotiations with the UAE Strategic Development Fund, the investment arm of the UAE Tawazun Council, over consolidating the recapitalization had begun to falter.
Reaction Engines is now said to be actively involved in several other investment options.
Time is running out to secure a financial package that would prevent the company falling into administration, although PwC is poised to be appointed as early as next week, according to a person close to Reaction.
Keep up with the latest news from the UK and around the world by following Sky News
Click here
It is believed that the strategic shareholders, BAE Systems and Rolls-Royce Holdings, have been asked to agree more flexible terms with the company.
In previous discussions, SDF would have emerged as the largest single investor in Reaction Engines, which has developed cryogenic technology aimed at powering planes at speeds of up to Mach 25 – or 19,000 miles per hour – outside the Earth’s atmosphere.
Sky News revealed earlier this month that the company had opened talks with the government about the deal, due to the sensitive defense and security implications in the context of the National Security and Investment Act.
A Reaction Engines spokesperson declined to say how many employees the company currently employs.
Source link