Deal undone? Britishvolt may not be saved
The rescue of the battery startup Britishvolt and its plans for one of only two cell factories in the UK is in jeopardy. The buyer, Australia’s Recharge Industries, has failed to make the final payment, the BBC reports quoting administrators.
While previous reports considered the buy-out a done deal, the report casts doubt on the sale. The BBC quotes documents from accountancy firm EY, showing that Recharge Industries has so far failed to make the final instalment of the total payment of 8.57 pounds million, which was due on 5 April 2023.
Recharge Industries disputes being in default. However, a spokesperson told the BBC that the timing of the final instalment payment would depend on a “funding facility, which when closed will also cover the cost of the land acquisition” and provide extra cash for the project.
She added that it expects to close the deal in August.
Britishvolt had planned to build a £4bn car battery factory in the north-east of England but went into administration in January after running out of money.
The project was laden with promise and considered a lifeline for the UK industry, which remains in dire need of a connection to the supply chains. Only the Chinese company Envision AESC wants to set up cell manufacturing capacity in Britain. The company will construct a large battery factory next to the Nissan plant in Sunderland to supply batteries to Nissan and other carmakers such as JLR. The latter’s parent company, the Indian Tata Group, recently announced that it was considering building a European battery factory, which would make sense given the JLR plants, especially in England.
As for Britishvolt and the deal with Recharge Industries, doubts remain even if the final instalment will be paid. The BBC reports the Australian offices of US investor group Scale Facilitation, which owns Recharge Industries, were raided in June for alleged tax fraud. Sources close to owner David Collard said that the raid was due to a misunderstanding between US and Australian tax returns and that all parties had cooperated.
Still, the raid cast further doubt over the final payment for the Northumberland site, which had been extended long beyond the original deadline of 31 March.
“The sale to the buyer had not completed as the final amount of deferred consideration was due to be paid on 5 April 2023,” says the report from EY to creditors seen by the BBC.
It added: “As noted in the proposals, the buyer purchased the company’s business and assets for £8.57m. This amount was payable in several instalments. The final instalment remains unpaid and overdue. As a result, the buyer is in default of the business sale agreement.”
Moreover, like Britishvolt, Recharge Industries is a start-up with little battery manufacturing experience. Its plan for the British site is to initially produce energy storage technology rather than batteries for electric vehicles.
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