UK-backed battery company Britishvolt is considering entering administration. Manufacturing sector | So Good News
Britishvolt, the UK government-backed battery start-up, is on the verge of entering administration with the potential loss of nearly 300 jobs after struggling to find investors to build a giant £3.8bn “gigafactory” in north-east England. .
Two sources familiar with Britishvolt’s operations told the Guardian that the company was considering an administration earlier on Monday. Going forward, Britishvolt has lined up accounting firm EY to handle the administration.
However, a source warned that Britishvolt was still examining other options to find a last-ditch savior, and could manage later in the week if those talks failed. The company is expected to remain in reserve for a few weeks without further support.
The BBC reported late on Monday night that Britishvolt had received funding for an unspecified amount, citing unnamed company sources. The Guardian understands that Britishvolt is trying to take on debt to prevent collapse.
A source told the Guardian that there was an uproar among staff after the company canceled a staff meeting and was told it could go into administration without being told what was going to happen. A spokesman for Britishvolt declined to comment on reports that funding had been secured.
London Electric Vehicle Company (LEVC), maker of the city’s popular electric taxis, announced separately on Monday that it would cut 140 jobs, capping a difficult day for the UK auto industry.
The Coventry-based business, which is owned by Chinese carmaker Zhejiang Geely, had a total of around 500 employees at the start of 2020. The cuts are planned to be succeeded by voluntary redundancies in response to the pandemic and disrupt supply chains. and “significant global economic challenges,” the LEVC said in a statement.
Britishvolt was founded three years ago with the ambitious goal of building a large factory that would supply batteries to car manufacturers. It quickly became an iconic project for the British auto industry and won the support of former prime minister Boris Johnson, who repeatedly cited the project as an example of Britain leading the way away from fossil fuels.
The government eventually pledged £100 million to the company, and the current prime minister, Rishi Sunak, is the chancellor. However, Britishvolt has yet to receive the money earmarked for factory equipment that has not yet been purchased.
The collapse of the economy could be an embarrassment for the Conservative government. Labor MP Ian Lavery told the BBC on Monday that Peter Rolton, the chairman of Britishvolt, had asked the government to give him a £30m subsidy, but the business secretary, Grant Shapps, had rejected the request.
Labor has pledged to support investment in at least three gigafactories in the UK. He said the government’s lack of support for growing industries was a scandal compared to other countries.
Labour’s shadow business secretary, Jonathan Reynolds, said: “This grim news is yet another reminder that the economic crisis is costing jobs and investment, as Downing Street has done. “It’s an all too familiar scene – businesses, jobs are being lost and investment in future industries is going overseas rather than the UK.”
Britishvolt has faced several months of disruption. Its co-founder, Orral Nadjari, left the company in July, and the Guardian reported in August that it had undertaken construction work to raise cash with a “life support” for its factory. That was followed by months of urgent talks with potential investors to cover Britishvolt’s rapidly growing costs until it was able to start producing batteries and earn its first revenues.
Britishvolt acknowledged financial difficulties, though they were blamed for deteriorating market conditions following Russia’s invasion of Ukraine.
Graham Hoare, a former executive at US carmaker Ford who took over after Nadjari’s departure, told the Financial Times the business needs to raise £200m in funding to survive until next summer.
Britishvolt has attracted tens of millions of pounds in investment from notable companies including miner Glencore and members of the FTSE 100, mining company Glencore and equipment rental company Ashtead. It also received a backing from majority-owned real estate investment firm Tritax. From FTSE 100 investor abrdn.
However, It is struggling to secure the next round of investment and is burning through £3m a month to pay 300 people, the Financial Times reported.
EY declined to comment. economy A spokesman for the Department of Energy and Industrial Strategy said: “We do not comment on business speculation or business matters of private companies.”