After last-ditch attempts to obtain emergency capital from a group of investors failed, the UK battery start-up Britishvolt plans to hire administrators.
The company announced its intention to appoint an administrator in a notice to the High Court on Tuesday, a move that might jeopardise the UK’s plans to become a global leader in battery manufacture.
According to two persons with knowledge of the matter, the board chose a late bid from a group of shareholders as a “preferred offer” on Friday but ultimately rejected it during a meeting on Monday.
The plan, which would have almost eliminated their stakes, had been opposed by several shareholders.
Britishvolt administration to puts 300 jobs in jeopardy
On Tuesday, Britishvolt, a company with 300 employees, is anticipated to submit a notice of intent to the insolvency courts. The administration, which was originally reported by the BBC, is reportedly being handled by EY, who is reportedly standing by.
The rights to a possible large site at Blyth in Northumberland, where it hoped to construct a £3.8 billion gigafactory, are the group’s only significant asset.
Because of its size, accessibility to transportation, and availability of clean energy, the site is commonly regarded as the ideal location for a battery plant.
In-house battery technology has also been developed by Britishvolt, however it is currently in the prototype stage.
Britishvolt was established in 2019 and advertised itself as the UK’s best chance at developing a domestic battery manufacturing leader. Britishvolt received investment from blue-chip firms Glencore and Ashtead, a commitment of £100 million in government funding, and a significant role in former prime minister Boris Johnson’s plans for a “green industrial revolution.”
Barracuda Group, were in talks over a £160m rescue deal
Last week, The Guardian reported that DeaLab Group, a UK-based private equity investor, and Barracuda Group, a related metals company, were in negotiations about a £160 million rescue proposal.
According to those with direct knowledge of the case, the existing investors came closer to winning a contract than the group linked to Indonesia, but they “did not have the adequate funds” to compete with Britishvolt. But eventually, it seems that neither party was able to come to an agreement.
The announcement would follow a string of delays to anticipated ones in recent days as executives evaluated the bids’ flaws. Two sources with knowledge of internal conversations said that the company’s leadership was most concerned that there were no assurances that anticipated follow-on investment would actually occur.
Britishvolt’s executive chairman, Peter Rolton, wrote in a letter to shareholders that DeaLab was “still in the process of acquiring non-binding and binding commitments from its investor consortia,” implying that the bidder was still looking for an additional £128 million in funding.
An all-staff meeting is scheduled for later that day, and discussions about the prospective cash infusion took place on Monday. That meeting, however, was then pushed back to Tuesday.
Britishvolt hopes to secure funding to secure the long-term sustainability
To secure the “long-term sustainability and finance essential to enable it to pursue its existing aspirations to construct a robust and successful battery cell R&D [research and development] and manufacturing business in the UK,” Britishvolt had stated that it hoped to receive funds. Construction on the complex, which was supposed to be able to produce at least 30 gigawatts of batteries annually, was halted last October as the company focused its attention to preventing collapse.
The UK government, which committed £100 million in funding to the initiative, saw the construction of gigafactories as a vital objective.
Britishvolt requested a £30 million advance on the funds last year, but the request was denied because the company had not reached the necessary thresholds to access the money. Two additional requests, for £11.5 million and then only £3 million, are said to have come after that, raising questions in government about the project’s financial soundness.
The news involving Britishvolt this morning are extremely alarming for the survival of this gigafactory and the thousands of much-needed jobs it promised to bring to South East Northumberland, according to Ian Lavery, the Labour MP for Wansbeck, where the factory was supposed to be built.
Read more: Yes recycling administration
Read more: Middletons Mobility shop in Swindon has gone into administration
Britishvolt narrowly avoided entering administration in October
After securing a last-minute injection of £5 million from Glencore, the mining giant that ranks in the top 100 of the FTSE, Britishvolt narrowly escaped going into administration in October. Glencore was already a shareholder.
If the factory is built, Glencore has an agreement with Britishvolt to provide cobalt, and the two companies have a joint venture for recycling batteries.
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.