The Britishvolt project billed as being the biggest scheme in the North East since the opening of the Nissan factory sold for just £8.6m after hitting huge financial difficulties, new documents have revealed.
The company - which had hoped to raise £4bn to create a gigafactory at Cambois that would have employed 3,000 people - went into administration at the start of this year, with an administrators’ report revealing losses of more than £150m. The company had not managed to generate any revenue and did not have any intellectual property, despite efforts to develop its own battery technology.
Efforts to save the company over a six-month period failed and though hundreds of potential new owners were contacted about taking over Britishvolt, only a handful of serious bids were made. Out of those, Australian firm Recharge Industries made easily the best offer and was able to buy the company for £8.58m.
Read more: North East technology firm secures £4m investment
A new report from administrators EY reveals that the company considered going into administration as early as last summer after only getting around 20% of the way towards an initial fundraising target of £800m. A grant of £100m from the Government never materialised as the company was unable to meet targets set for the funding to be released.
A potential sale of the company in January also fell apart when shareholders failed to agree to a deal to sell a 95% stake to new investors. Directors concluded that there was no reasonable prospect that the company could avoid insolvency and appointed EY to take over the running of the firm.
The initial administrators’ report reveals a long list of creditors, led by German firm DC Energy, which is owed £26.6m, and South Korean company Hana Technology, owed £22.3m. A total of 233 former employees are owed more than £5m, the documents reveal.
It also reveals that the new owners of the site face big challenges in bringing the gigafactory plant to reality, saying that “it is estimated that any purchaser would need access to significant financing in the range of £3bn to £6bn to fund the capital expenditure required to complete the development of the gigaplant.” It is believed that the new owners would also have to re-apply if it wanted to take up the Government’s £100m grant.
Recharge Industries said last month that it would create “thousands of green, skilled and local jobs” in Northumberland after completing its deal to buy Britishvolt.
The company has said it would initially focus on batteries for energy storage before moving to produce batteries for high-performance sports cars, he said. The company hopes to start work on the site - the former coalyards of the old Blyth Power Station - in six-to-12 months.
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