Reaction Engines crashes into administration - report

(Sharecast News) - Reaction Engines has reportedly crashed into administration after weeks of talks with potential backers failed to result in a rescue deal. According to Sky News, 173 of the company's 208 staff were made redundant on Thursday morning by administrators PricewaterhouseCoopers.

The collapse of a company which makes advanced cooling technology for engines also threatens to create a headache for a quartet of Formula One racing teams which use engines supplied by Mercedes-Benz.

According to Sky, roughly £20m in additional funding to keep Reaction Engines alive had initially focused on the UAE's Strategic Development Fund (SDF), the investment arm of the UAE's Tawazun Council.

However, these began to falter 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 administrator and partner, PwC, told Sky: "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.

"We know this is a deeply uncertain and unsettling time for the Company's talented and dedicated employees.

"We are committed to providing them with all the necessary support at this time."

Sky News revealed earlier this week that administrators were expected to be appointed on Thursday.