Battery start-up Britishvolt has appointed administrators from Big Four accountancy group EY following a failed eleventh-hour bid to rescue the company.
The Blyth business had been embroiled in last-ditch-hour meetings in the hope of finding a buyer to save it, and keep plans for its £3bn electric battery gigafactory alive. Now, however, EY has confirmed that the company collapsed because of insufficient equity investment, to fund both the ongoing research it was undertaking as well as the development of its sites in the Midlands and the North East.
Last May Britishvolt laid out plans to set to create a UK ‘battery corridor’ by building a £200m scale-up facility in the West Midlands, focusing around a 260,000 sq ft factory at Hams Hall park near Birmingham, creating and sustaining in excess of 150 skilled tech jobs.
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The firm's collapse follows months of discussions to secure funding, culminating in three separate bids from groups who expressed interest in taking a majority stake, with offers said to fall millions below the firm's value just one year ago.
EY confirmed that Dan Hurd, Jo Robinson and Alan Hudson of EY-Parthenon’s turnaround and restructuring strategy team were appointed joint administrators of Power by Britishvolt Limited on Tuesday, January 17. A statement from the EY confirmed that almost all staff at the firm, incorporated in 2019 as the main UK company in the wider Britishvolt Group, had been made redundant with immediate effect. No other entities in the Britishvolt Group, including a number of UK entities, are in Administration.
The joint administrators are now 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.
Mr Hurd said any parties interested in acquiring the business and its assets should contact the administrators as soon as possible.
He added: “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.”
Following the announcement. Wansbeck MP Ian Lavery told BBC Radio Newcastle how he feared for the project, adding: "If indeed Britishvolt is in the position where it has failed, we're going to have to ask the Government to step in and put its money basically where its mouth is. If you want to level up in the North East and if you want to level up in South East Northumberland, make sure you support something on the Britishvolt plant, to the same magnitude of the £4bn project proposed by Britishvolt."
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Last week, lengthy discussions took place between Britishvolt and competing consortiums tabling takeover offers. DeaLab Group had tabled a deal with Barracuda Group worth £32m for 95% of the company – valuing Britishvolt at 96% less than it was worth a year ago. A second bid from existing shareholders’ offer was said to be £30m, for 92.5% of the company.
Britishvolt’s financial troubles became clear when it said it had been unable to access a £100m Government grant promised last January, when then Business Secretary Kwasi Kwarteng hailed the start-up’s project at a ceremony in Blyth.
Months later, a request to draw down £30m of the funds was refused, with the Department for Business, Energy and Industrial Strategy saying he money would only be released once the firm has met certain milestones, including securing private investment and orders from customers.
Henri Murison, Chief Executive of the Northern Powerhouse Partnership, said: “This is a significant blow for the workers involved and the wider UK car industry, where jobs depend long-term on domestic battery plant capacity. This is evidence of the need for a different business model. In nearby Wearside the Nissan/Envision project is being successfully delivered, in part because it had a customer secured before going ahead.
“Blyth is still the best place in the country to build a gigafactory, and there are wider opportunities in R&D thanks to its renewable energy catapult centre and links with Newcastle University. Innovation-led growth is powering the region’s world-class green economy.”
Labour’s Shadow Secretary of State for Business and Industrial Strategy, Jonathan Reynolds MP, said: “Conservative economic failure is costing working people and British business. The Government’s long-term failure on industrial strategy means we’re losing the global race for electric vehicle battery manufacturing putting our world-famous car industry at risk. Under this Government local communities are watching businesses shutting their doors, job opportunities going abroad and investment leaving Britain."
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