A British company aiming to pioneer hypersonic flight and which counts Boeing and Rolls Royce Holdings among its backers is scrambling to raise new funding amid a squeeze on cashflow.
Sky News has learnt that Reaction Engines, which is based in Oxfordshire, has appointed advisers to raise fresh capital.
Shareholders in the company, which also include the FTSE-100 arms manufacturer BAE Systems, have been informed about the efforts to secure new money in recent weeks.
Silverpeak, an advisory firm, has been appointed to orchestrate the fundraising, with the company believed to be in need of tens of millions of pounds more capital.
Reaction, which was founded in 1989, 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 putside the Earth’s atmosphere.
In an update to investors, seen by Sky News, Mr Dunne said its financial performance last year had “not been in line with our forecasts”.
Warning that Reaction Engines would also be lossmaking this year, he added: “Although the company has a successful track record of raising capital it is clear market conditions are tougher than when we last raised new equity in 2022.”
In January last year, it announced it had raised £40m of additional equity, taking the total sum it had banked from investors to roughly £150m.
“As an emerging technology company we have always sought to be prudent in managing our costs; however, we took additional steps to control costs and focus investment in areas that will support near-term revenue generation,” Mr Dunne wrote.
“As a result, we were able to keep the loss for 2023 broadly in line with our budget for the year.”
“It became apparent during [the first quarter] that there was a continuing mismatch between the resource we had added in anticipation of growth and development of the sales pipeline.”
He added the company’s workforce had been cut earlier this year, with its leadership structure simplified.
Reaction Engines’ ability to attract interest and funding from some of the world’s biggest aerospace companies underlines the excitement it has galvanised among both strategic and financial investors.
Its shareholders also include Schroders, Baillie Gifford Asset Management and the UAE’s Strategic Development Fund.
Reaction Engines declined to comment on its quest for new funding.