The company is struggling to find investors willing to fund efforts to build giant £3.8bn ‘gigafactory’ in the northeast of England.
Britishvolt, a government-backed battery startup, is looking to go into administration after it failed to find investors to finance its efforts to build a massive £3.8bn “gigafactory”, in north-east England.
Britishvolt’s 95-hectare Northumberland site has been restricted to a minimum of work until February. This was in order to limit spending and allow it to focus on its next round of funding.
Britishvolt has attracted a growing number of investors, including FTSE 100 commodities traders Glencore, FTSE 100 equipment rentals company Ashtead and Tritax, which is an arm of Abrdn. Aston Martin, Lotus and other institutional investors have expressed interest in purchasing batteries from Britishvolt.
It claims that its factory will be the fourth largest building in the UK, and the sixteenth in the world.
Update: #Britishvolt will reportedly collapse into administration as soon as today. It had been sounding out potential suitors including Jaguar Land Rover owner Tata Motors over a £200m cash raise or outright sale. But the discussions have ended without a deal, the FT reports https://t.co/Cgo6umGBji pic.twitter.com/CxCLaLttns
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Two sources familiar with Britishvolt’s operations informed the Guardian that the company could declare administration on Monday. EY is lined up to handle it if the plan goes through. One source said that Britishvolt was still looking at other options.
Britishvolt spokesperson stated that the company policy was to not comment upon market speculation.
Britishvolt was established less than three years ago. Its ambitious goal was to build a huge factory capable of producing batteries for carmakers. It became a major project in the UK’s automotive industry and was supported by Boris Johnson, the former prime minister. Johnson repeatedly mentioned the project as an example of Britain moving away from fossil fuels.
While Rishi Sunak was the chancellor, the government finally gave the company a promise to provide financial support of £100m. The money was intended for the purchase of tooling in the factory but has yet to be received by the company.
For months, the company has been struggling with disruption. Orral Nadjari, the co-founder of the company, left in July. The Guardian also revealed that the company had placed building work at its factory on “life support” in August to save cash. The company then had to have urgent discussions with potential investors in order to cover its rapidly rising costs. It was finally able to produce batteries and receive its first revenues after months of these talks.
Britishvolt acknowledged its financial problems but blamed the deteriorating market conditions following Russia’s invasion. Graham Hoare, an ex-Ford executive, said to the Financial Times that the company needed to raise £200m in order to finance it until next summer.
Britishvolt has been able to attract tens and millions of pounds in investment from well-known companies, including Glencore Mining Company and Ashtead Equipment Rental Company, both of which are members of the FTSE 100. Tritax, a major shareholder of FTSE 100 investor abrdn, also promised support.
According to the Financial Times, the company has had difficulty securing the next stage of investment. It is currently spending £3m per month on cash to pay 300 employees.
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