Plans to bring thousands of jobs to Northumberland have been jeopardised as administrators have been appointed to battery start-up Britishvolt.
The firm had been holding 11th hour meetings in the hope of finding a buyer to save it and its plans to build a £3.8bn gigafactory at Cambois, which promised to deliver 3,000 jobs and 5,000 more in the supply chain. Now insolvency experts at EY have been appointed to the firm and the majority of its 300 staff have been redundant.
The move follows high level talks on Friday at which Britishvolt was considering competing takeover offers - one involving private equity investor DeaLab Group leading a consortium, and a second rival bid from a number of existing shareholders.
A third bid was also reported to be on the table. It follows months of financial difficulties for the firm - which already employs 300 people - after it was unable to draw down on part of £100m government funding promised to it in 2022.
Confirming the latest move, EY said it had been called in due to insufficient investment to fund Britishvolt's ongoing research and the massive development of its sites in the Midlands and the North East. The insolvency specialist said it would now close and wind down the company's affairs.
Dan Hurd, joint administrator and partner at EY-Parthenon said: "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."
A spokesperson for the Department for Business, Energy and Industrial Strategy said: "As part of our efforts to see British companies succeed in the industry, we offered significant support to Britishvolt through the Automotive Transformation Fund on the condition that key milestones – including private sector investment commitments - were met.
"We remained hopeful that Britishvolt would find a suitable investor and are disappointed to hear that this has not been possible, and therefore no ATF grant has been paid out. Our thoughts are with the company’s employees and their families at this time, and we stand ready to support those affected.
"The UK is one of the best locations in the world for automotive manufacturing, and we want to ensure the best outcome for the site. We will work closely with the Local Authority and potential investors to achieve this, as part of our commitment to boost homegrown electric car battery production, level up and advance towards a greener future."
Wansbeck MP Ian Lavery said: “The reports this morning that Britishvolt have gone into administration following a number of failed takeover bids are extremely disappointing and a massive blow to the region which was set to benefit from the thousands of much needed jobs the project promised to create. This development was once the crown jewel of the Government’s levelling up policy in the North East but is now in grave danger of collapsing.
"Back in July Boris Johnson when he was the Prime Minister told me that the cheque was in the post to Britishvolt, but the reality is they have never received penny from the Government. If they are serious about levelling up the North East the Government need to put their money where its mouth is and get behind a gigafactory being built on this site in Cambois."
Labour’s Shadow Secretary of State for Business and Industrial Strategy 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."
It is understood that staff were told of the developments at a meeting on Monday lunchtime. DeaLab Group is reported to have tabled a deal with Barracuda Group worth £32m for 95% of the company – valuing Britishvolt at 96% less than it was worth just a year ago.
The initial offer would have been followed by a further £128m investment later in the year. The existing shareholders’ offer is said to be £30m for 92.5% of the company.
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