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British hypersonic aviation company Reaction Engines is on the verge of securing a £20 million rescue deal led by the UAE’s Strategic Development Fund (SDF), which would become its largest shareholder.
Split into two phases, the deal involves an initial loan followed by an equity injection. This deal is subject to UK government approval the deal under the National Security and Investment Act due to the advanced technology involved.
Touted as Concorde’s successor, Reaction Engines has gained attention for its development of engine technology that can power aircraft at speeds of Mach 25, or 19,000 miles per hour, outside the Earth’s atmosphere.
Uncertain future of Reaction Engines amid financial struggles
Although the SDF is set to become the largest shareholder in Reaction Engines, it will not hold a majority stake in the company. Reaction Engines has been grappling with a significant cash crunch, despite increasing its commercial revenues by over 400% last year.
The proposed rescue plan is essential to prevent the company from filing for insolvency, with PricewaterhouseCoopers (PwC) already on standby as a potential administrator if the financing falls through.
Multinational aerospace company BAE Systems, one of the current investors, may contribute a small sum, though Rolls-Royce has chosen not to participate in the rescue effort. Ongoing discussions with new investors are crucial, as the company faces imminent insolvency without swift funding. Insolvency is likely inevitable unless the first phase of funding is secured soon, says the company.
Established in 1989, Reaction Engines has garnered substantial interest and funding from major aerospace companies. Last year, it raised £40 million in equity, contributing to a total investment of £150 million.
Despite this, financial struggles have persisted. According to Chairman Philip Dunne, tough market conditions forced the company to reduce staff and streamline its leadership structure earlier this year.
Reaction Engines’ 3D printing expertise
Reaction Engines has been reportedly leveraging 3D printing for its aerospace efforts. In 2018, Boeing and Rolls-Royce invested £26.5 million in Reaction Engines working on the AM-enabled SABRE engine for hypersonic travel. Capable of Mach 25 speeds, SABRE was designed for both military and long-haul flights.
Reaction Engines raised over £100 million in recent years, receiving backing from BAE Systems and the UK Government. A significant development was its heat exchanger technology, which helped cool air during flight. The propellant injector system, essential for the engine, was made using 3D printing to prevent ice formation.
Three years ago, Reaction Engines developed the SABRE engine for the SKYLON spaceplane, incorporating a 3D printed propellant injector. In 2013, the UK government invested £60 million, and the company secured a €1 million contract with the European Space Agency (ESA).
By 2014, Reaction Engines partnered with the U.S. Air Force Research Laboratory (AFRL) to advance the SABRE engine’s ability to operate in both air-breathing and rocket modes. The engine underwent successful test firings, and its advanced cooling system, using a 3D printed injector, rapidly cools air for spaceflight.
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Featured image shows Reaction Engines’ Sabre engine. Image via Reaction Engines.
