Britishvolt claims it has received funding for a few weeks and that its 300 employees have accepted a pay cut. The UK government-backed startup is trying to find a buyer, or a new investor long-term to prevent collapse.
After the government rejected a request for £30m grant funding, the company was ready to appoint administrators.
Britishvolt was founded less than three years ago and set out to become the UK’s leader in the race to develop next-generation electric cars. It announced that it has received a funding guarantee to enable it to survive at most until next month. It refused to disclose the amount, duration or identity of investors.
A spokesperson for the company stated that they have secured the near-term investment necessary to allow them to bridge the next weeks to a better funding position for the future. “To further reduce our near-term costs, our dedicated employee group has also voluntarily agreed to a temporary reduction in their salary for the month of November.”
Britishvolt’s executive staff will not be paid for November. Directors will receive 25% and most of its workforce 50% respectively, according to the Guardian. Britishvolt spokesperson stated that the pay cuts were voluntary.
According to a source familiar with Britishvolt’s operations, however, failure to make the required payroll cuts would likely leave the administration as the only alternative.
Britishvolt is backed by Glencore, a mining company in the FTSE 100, and Ashtead, an equipment rental company. Britishvolt has been in contact with a variety of potential buyers, including Tata Group, the Jaguar Land Rover owner. Talks with potential investors ended last week.
Britishvolt spokesperson stated that “the weakening economic environment is negatively impacting many business investments at the moment, but we are continuing to pursue constructive ongoing discussions with potential investors.” “We have received several promising approaches from international investors over the last few days.”
Although the government had allocated £100m to support Britishvolt’s factory project, funds were only released if construction milestones are not met.
Britishvolt has been in turmoil for months, and Orral Nadjari, its co-founder, left the company in July.
Graham Hoare, an ex-executive at Ford USA, who took over following Nadjari’s exit, said that the company needs to raise £200m to survive next summer. However, the company is spending as much as PS3m per month on salaries after a hiring spree. It doesn’t expect to begin production at its main plant until 2025, two years later than originally planned.
Britishvolt acknowledged its financial problems but blamed them on the deteriorating market conditions following Russia’s invasion.
Britishvolt’s proposed location in Blyth Northumberland is being closely watched by competitors. It is believed to be one the most desirable locations in Europe for battery manufacturing due to its deep seaport and rail links, as well as clean energy.
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