Reaction Engines’ administrators line up sale of hypersonic technology

Pioneering propulsion technologies developed by failed UK firm Reaction Engines could live on, with the sale of its assets to a preferred bidder seemingly in its final stages, the insolvency specialists handling the company’s winding-up have disclosed.

Reaction, an Oxford University spin-out, had been working on a hypersonic propulsion system it called SABRE, plus associated next-generation thermal-management technologies.

However, the company collapsed into administration on 31 October last year after failing to secure additional funding, with Peter Dickens and Sarah Myers from accountancy firm PricewaterhouseCoopers appointed to manage its affairs.

Although all but 36 of its 208 employees were laid off and operations halted, work continued on a specific contract until the end of December, generating additional revenue of £1.8 million ($2.4 million), the administrators disclose in a progress report dated 30 May but covering the period until end-April.

Once this work was completed, a sales process for Reaction’s assets – chiefly its intellectual property – was launched.

Interested parties initially submitted non-binding offers, with several potential bidders then granted access to Reaction’s books at the beginning of March. Further offers were received around the middle of that month and four parties selected to advance to the next stage of the process.

Final offers were submitted by mid-April and a preferred bidder selected “with whom they have entered into a period of exclusivity”, the report states, noting that “the process is ongoing”.

Reaction’s directors had valued the firm’s IP – patents, trade secrets and trademarks – at £848,000, the report says.

In December, the administrators put Reaction’s total deficiency at over £160 million, including now-worthless shareholdings of more than £150 million.