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A British hypersonic aviation campaign which has been hailed as a successor to Concorde is this weekend racing to avert collapse.
Sky News has learnt that Reaction Engines has lined up PricewaterhouseCoopers (PwC), the accountancy firm, to act as administrator if its quest to secure new funding is unsuccessful.
The company is understood to be in detailed talks with the UAE state-backed Strategic Development Fund (SDF), one of its existing shareholders, about an injection of new capital.
A number of Reaction Engines’ other investors are also said to be considering whether to assist with new funding for a company which has previously raised £150m and is now said to require tens of millions of pounds more within weeks.
One source said on Saturday: “They are running out of time.”
PwC is understood to have been placed on standby to oversee an insolvency of Reaction Engines if the financing discussions fail.
The company’s existing investors include BAE Systems and Rolls-Royce, the FTSE-100 defence and aerospace companies.
It was unclear whether they would be willing to commit new money to ensure Reaction Engines’ survival.
Founded in 1989, Reaction Engines is chaired by Philip Dunne, a former defence minister.
A specialist in developing advanced propulsion systems, the company is developing a new type of engine aimed at powering aircraft to Mach 25 – or 19,000 miles per hour – outside the Earth’s atmosphere.
This week, Sky News revealed that Artemis, the fund manager, was slashing the value of its 2.3% stake in Reaction Engines by 75% amid concerns about its future and its commercial income.
Read more: Fund manager slashes value of Reaction Engines stake
A statement on Friday from Artemis echoed one issued the previous day by Schroders Capital Global Innovation Trust, which said it had decided to cut the value of its holding from £10.6m to £1.4m.
That revalued the entirety of Reaction Engines, whose shareholders also include the FTSE-100 companies…
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