Britishvolt in financial straits?
Britishvolt may soon have to file for insolvency, according to media reports. The company is said to have asked the British government for a financing advance of 30 million pounds. However, this was refused, so now the existence of the company is apparently at stake.
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Britishvolt is known to be planning a battery cell factory in Blyth in the northeast of England and received a funding commitment of 100 million pounds from the British government for the construction of the production facility earlier this year, making the announcement somewhat surprising. This government cash injection should pave the way for private financing. Funds amounting to 1.7 billion pounds are said to have been pledged by investors Tritax and Abrdn, among others.
However, the government’s funding is linked to the fulfilment of certain criteria and has reportedly not yet been paid out yet. Britishvolt is now said to have asked the government for an advance of 30 million pounds to continue the project, which has already begun. However, the new business minister Grant Shapps has refused this, according to reports.
The BBC bases this information on statements by Ian Lavery, the Labour MP for the Wansbeck district, where the plant is currently being built. According to the report, Lavery spoke with the chairman of Britishvolt on Monday. He said that in light of the government’s cancellation, the latter had expressed that “it is very likely that Britishvolt will go into receivership.”
Britishvolt has struggled to find investors to fund the construction of its cell factory in Blyth. Plans have had to be postponed several times. Originally, the plant was scheduled to start up at the end of next year. Subsequently, commissioning was first moved to the end of 2024 and then to mid-2025. The reasons given for the latest postponement were “difficult external economic headwinds, including galloping inflation and rising interest rates.”
Back in August, Britishvolt announced the resignation of its founder and CEO Orral Nadjari. Even at that time, there were reports of funding problems. The project was first announced in mid-2020, and Blyth was confirmed as the location of the battery factory in December of that year. Since then, the company has entered into numerous raw material and development partnerships, including with German companies such as Siemens and Manz. Construction work has been underway since the autumn 2021.
Update 2 November 2022
Britishvolt appears to have averted the threat of insolvency for the time being. As the BBC reports with reference to insiders, Britishvolt was able to generate capital to “stay afloat in the short to medium term”. However, it is still unclear how much money is involved and from whom it comes, or how long it will last.
Update 3 November 2022:
A day after the BBC report, Britishvolt itself has commented on the current situation – “Given the recent speculation about the future of Britishvolt”, the company wants to make the situation clear to “all of our stakeholders”, the short statement reads. It states that the company “have now secured the necessary near-term investment that we believe enables us to bridge over the coming weeks to a more secure funding position for the future.”
To further reduce short-term costs, Britishvolt says its staff have also voluntarily agreed to a temporary pay cut for the month of November. Despite the weakening economy, the company says it is “continuing to pursue positive ongoing discussions with potential investors”. “In addition, we have also received promising approaches from several more international investors in the past few days,” the company said.