Britishvolt, a UK battery start-up that went bankrupt last month, has chosen an Australian company as its preferred bidder.
The New York-based fund Scale Facilitation Partners has entered into an agreement to acquire Recharge Industries, the parent company of Britishvolt.
Without sufficient funds, Britishvolt was forced into administration.
As previously reported, the company intended to construct a massive factory to produce batteries for electric vehicles in the vicinity of Blyth, Northumberland.
“Completion of the deal is expected to conclude within the next seven days,” said EY, the accounting firm and administrator to Britishvolt that has been managing the sale.
In order to meet the growing demand for electric vehicle batteries, Recharge Industries is constructing a factory in Australia.
As of yet, few specifics are known about its plans for the Britishvolt company, which had aimed to construct a £3.8bn factory as part of a long-term ambition to increase production of electric vehicle batteries in the United Kingdom.
It was anticipated that 3000 new high-quality jobs would be generated. However, when Britishvolt went under, almost 200 employees lost their employment.
For several reasons, including “tough external economic headwinds including rampant inflation and rising interest rates,” it had to push back the beginning of plant production.
The construction of this battery plant is viewed as critical to ensuring the long-term success of the UK auto industry. However, a similar attempt by Britishvolt, a start-up with unproven technology run by persons unknown in the battery and automobile sector, ended in a spectacular disaster last month when the company went into administration.
By paying more than the other bids, Recharge Industries was able to acquire Britishvolt out of bankruptcy. The company justified the higher price by saying it was investing in a project that would combine Australian resources, US battery know-how, and a good UK site.
However, the judges don’t have to take any of that into consideration when deciding the winners. EY’s sole responsibility is to maximise compensation for creditors of the defunct Britishvolt.
While the government claims to be “watching the situation,” it has insisted that this is an issue between the companies themselves. However, leaders in the business are nonetheless dissatisfied that ministers aren’t playing a more active, strategic role in this pivotal moment.
The statement made today raises more concerns than it answers and should be regarded as the start, rather than the finish, of this process.
It “can’t wait to get started making a reality of our aspirations to develop the UK’s first gigafactory,” David Collard, CEO of Scale Facilitation and founder of Recharge Industries, said.
According to the company’s website, construction of the battery facility in Geelong, Melbourne, began in 2018 and is scheduled to be completed in 2024.
According to reports, Recharge was chosen as Britishvolt’s preferred bidder after competing with a number of other companies.
According to EY, the company used a method “that involved the consideration of many approaches from interested parties and numerous proposals received.”
The acquisition of Britishvolt would definitely give them a toe-hold in Europe,” Indriatti van Hien, deputy fund manager at Janus Henderson Investments, told the BBC.
Interesting fact: many British firms are also competing for this asset.
The government’s “levelling up” policy, begun by former Prime Minister Boris Johnson, took a hit with Britishvolt’s demise.
Blyth was one of the key so-called “red wall” seats to switch from Labour to the Conservatives in the 2019 General Election, and its economy was expected to benefit from the investment.
The government had promised to put up £100 million towards the endeavour. Since then, the firm has raised an additional £1.7 billion from a group of private investors thanks in large part to this factor.
Britishvolt’s facility and the employment it will produce were described by the then-Business Secretary, Kwasi Kwarteng, as “exactly what levelling up looks like.”