Britishvolt, which owed approximately £160 million to unsecured creditors, is expected to provide only a minimal dividend from its insolvent estate.
In January, the battery start-up went into administration as it was unable to secure emergency funding. Despite its intention to construct a gigafactory on the Northumberland coast, it encountered difficulties in raising equity investment for both its research and site development.
The business secretary, Grant Shapps, declined to permit Britishvolt to access £30 million in bridging finance from the government’s Automotive Transformation Fund due to the company’s inability to fulfil critical targets.
Following this development, Britishvolt was acquired by Recharge Industries, an Australian company operated by Scale Facilitation, a New York-based investment fund.
EY advisers are currently overseeing the administration of Britishvolt and handling creditor claims. According to their estimates, Recharge may need to invest as much as £6 billion to develop the Northumberland gigafactory.
Recharge has acquired Britishvolt’s battery technology and will make a decision on whether to purchase the site by the end of this month.
Britishvolt secured £167.5 million in equity finance through multiple fundraising rounds between late 2020 and the summer of 2022. In July 2022, the company completed its largest fundraising round of £84 million, shortly before it became necessary to curtail expenses in order to remain operational.
Between August 2021 and November 2022, Glencore, Ashtead, and Turnwave Investments provided a combined debt financing of £33.8 million to Britishvolt.
During the summer of 2022, Britishvolt faced challenges in raising equity funding and consequently negotiated payment plans with suppliers and creditors. Non-essential spending was deferred to help alleviate the situation.
Administrators have reported that unsecured claims are expected to range between £130 million and £160 million. However, the final amount could be significantly higher or lower, depending on the number and validity of the claims received.
EY’s report notes that it is too early to determine whether there will be sufficient funds available to pay a dividend to non-preferential creditors.
“If a dividend can be paid to non-preferential creditors, considering the costs of the administration process and future realizations, the joint-administrators anticipate that the dividend will amount to less than one penny per pound.”
