Britishvolt appoints administrators after rescue talks fail
UK battery start-up Britishvolt has appointed administrators, after failing to secure a rescue deal.
A notice was filed by the firm to the High Court today (January 17) with workers asked to a meeting at 12pm before a public announcement is made.
The battery manufacturer, which was aiming to build a £3.8bn gigafactory in Blyth in the north-east, as well as a £200m battery scale up facility with its partner Prologis in the West Midlands has made the majority of its 300 staff redundant with immediate effect.
Dan Hurd, Jo Robinson and Alan Hudson of EY-Parthenon’s turnaround and restructuring strategy team were appointed joint administrators.
In a statement, EY said: “The company has entered into 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 Joint Administrators are assessing the options for realising the potential value in the business and assets of the Company, including intellectual property and R&D assets, for the benefit of creditors. The Administrators will subsequently implement an orderly closure and winding down of the Company’s affairs, as required.
“As a result, regrettably, the majority of Power by Britishvolt Limited employees have been made redundant with immediate effect. All those impacted are being offered appropriate support and advice”.
Dan Hurd, joint administrator and partner at EY-Parthenon commented: “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 were reportedly running out in cash in October, but had avoided collapse and had secured enough backing to stay afloat “short to medium-term”.
The Government had made a £100m commitment to bring forward a £1.7bn sale and leaseback of the Britishvolt property in Blyth, Northumberland, in January 2021. However, it had withdrawn this offer since it found it would be used for day-to-day operational costs.
Last week, Britishvolt was in talks to sell a majority stake to investors, with a £160m deal on the cards with DeaLab Group, a UK-based private equity group ran by Reza Eko Hendranto, an Indonesian banker.
The terms of the rescue deal would have seen investors pay an initial £30m for 95% of the business with a further £128m to follow. It would leave existing shareholders with 5% of the business, worth less than £2m.
This would however have valued Britishvolt at £32m, a 96% difference from February 2021 when it was valued at just under £800m.
Unite national officer for the automotive sector Steve Bush said: “This is a grim day for the North East and for the just transition to the electrification of the nation’s automotive sector.
“The complete lack of a competent industrial strategy by the government to protect jobs in the UK automotive sector is becoming potentially more catastrophic by the day.
“It is extraordinary that despite the UK automotive sector being required to move to the production of electric vehicles, there are still no UK stand-alone factories making the batteries that are required. The demise of Britishvolt means there are not even any in the pipeline.
“The government’s strategy seems to be to cross their fingers and hope that everything will be ok. The workers in the automotive sector are frankly enraged at this dreadful and total abdication of leadership.”