Reaction Engines, the British leader in supersonic aviation, has crashed into administration after weeks of talks with potential backers failed to produce a rescue deal.
Sky News has learned that 173 of the company’s 208 staff were made redundant on Thursday morning by directors at PricewaterhouseCoopers (PwC).
The collapse of the company that makes advanced engine cooling technology also threatens to cause headaches for the quartet of Formula 1 racing teams that use engines supplied by Mercedes-Benz.
Talks to secure Nearly £20 million of additional funding to keep Reaction Engines alive was initially focused on the UAE Strategic Development Fund (SDF), the investment arm of the UAE Tawazun Council.
However, this She started to stumble Earlier this month, with strategic shareholders BAE Systems and Rolls-Royce Holdings unwilling to provide enough capital to bail it out.
In a statement on Thursday, Sarah O’Toole, joint director and partner at PricewaterhouseCoopers, said: “It is extremely unfortunate that a pioneering company with a 35-year history of driving innovation in aviation has unfortunately been unable to raise the funding required to continue.” Operations.
“We know this is an extremely uncertain and worrying time for the company’s talented and dedicated employees.
“We are committed to providing them with all necessary support at this time.”
Sky News revealed earlier this week that officials are expected to be appointed on Thursday.
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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.
According to Reaction Engines’ latest shareholder update, it has increased its commercial revenues by more than 400% in the past year and is understood to have a strong pipeline of contracts and R&D opportunities.
In January last year, Reaction Engines announced it had raised £40m of additional equity, bringing the total amount it has taken from investors to around £150m.
The company was founded in 1989 and is headed by Philip Dunne, the former Minister of Defence.
“The company has been funded primarily through grants and equity fundraising, given its focus on research and development.”
PricewaterhouseCoopers said.
“The company was pursuing opportunities to raise more funds, but unfortunately, these attempts were unsuccessful.
“Therefore, the directors had no alternative but to place the company into administration.
Reaction Engines’ remaining staff will be temporarily retained at its Oxfordshire base “to complement a number of existing orders and support in winding down operations”, PwC added.