(qlmbusinessnews.com via theguardian.com – – Tue, 17th Jan 2023) London, Uk – –
Staff told majority of firm’s 300 employees would be immediately made redundant on Tuesday morning
The battery startup Britishvolt has collapsed into administration with the majority of its 300 staff made immediately redundant after talks about a rescue bid from several investors failed.
Britishvolt filed notice to appoint an administrator in the insolvency courts on Tuesday and the accountancy firm EY has confirmed it has taken on the administration.
Staff were told the “majority” of its 300 employees would be immediately made redundant on Tuesday morning.
The company’s efforts to build a large facility near Blyth in Northumberland had stalled in recent months as it struggled to find a cash injection to pursue the project.
EY said the company had entered administration “due to insufficient equity investment for both the ongoing research it was undertaking and the development of its sites in the Midlands and the north-east of England”.
The administrators, one of the big four accountancy firms, will now assess the company’s assets, including its intellectual property and research, in an effort to pay creditors and will subsequently wind down its affairs.
Britishvolt had said on Monday that it was in talks over a “majority sale” of the business but those discussions appear to have failed.
Shareholders had been voting on potential new investors in the £3.8bn “gigafactory” project, which was seen as a key pillar in supplying the next generation of electric vehicles built in the UK.
The company’s management had been in talks with a number of potential investors, including existing investors keen to prevent the value of their holdings from being wiped out, and an obscure Indonesia-linked group with little experience in manufacturing.
The Guardian revealed last week that DeaLab Group, a UK-based private equity investor, and an associated metals business, Barracuda Group, were in talks over a £160m rescue deal.
Sources close to the situation said the existing investors had been closer to securing a deal than the Indonesia-linked consortium which “did not have the necessary funding” required to take on Britishvolt. However, ultimately, both appear to have failed to reach a deal.
The administration came after numerous delays to expected announcements in recent days as executives weighed weaknesses in the bids. Most notably, the company’s leadership had concerns that it had no guarantees that promised follow-on funding would materialise, according to two sources with knowledge of internal discussions.
Dan Hurd, joint administrator and partner at EY-Parthenon, said: “Britishvolt provided a significant opportunity to create jobs and employment, as well as support the development of technology and infrastructure needed to help with the UK’s energy transition.
“It is disappointing that the company has been unable to fulfil its ambitions and secure the equity funding needed to continue.
“Our priorities as joint administrators are now to protect the interests of the company’s creditors, explore options for a sale of the business and assets, and to support the impacted employees.”
Britishvolt was hoping to build the 30 gigawatt hours gigafactory in phases, manufacturing enough battery cells a year for more than 300,000 electric vehicle battery packs, equivalent to about a quarter of current UK vehicle manufacturing. However, construction work stopped last autumn as its focus turned to staving off collapse.
Building gigafactories is seen as a key aim by the government, which had promised £100m support to the project.
Britishvolt asked for a £30m advance on the funds last year but was rejected as the company had not hit certain milestones needed to access the funds. That was reportedly followed by two further requests, for £11.5m and then just £3m, raising concerns in government about the financial stability of the project.
Ian Lavery, the Labour MP for Wansbeck, where the factory was to have been built, said the situation was “deeply concerning” and noted that the project was “once the crown jewel of the government’s levelling up policy in the north-east”.
Britishvolt narrowly avoided entering administration in October after it secured a last-minute injection of £5m from the FTSE 100 mining company Glencore, which was already an investor. Glencore had a deal with Britishvolt to supply cobalt to the factory.
A Department for Business, Energy and Industrial Strategy spokesman said: “We remained hopeful that Britishvolt would find a suitable investor and are disappointed to hear that this has not been possible, and therefore no ATF [Automotive Transformation Fund] grant has been paid out.
“Our thoughts are with the company’s employees and their families at this time, and we stand ready to support those affected.”
By Alex Lawson and Jasper Jolly