British Auto Battery Start-Up in Battle for Survival

UK battery start-up, Britishvolt, is clinging on to the hope of attracting major new investment after the government withheld expected funds.

The BBC reports that the prospects for the company are on a knife edge over fears it could run out of money after the government rejected a £30M ($34.4M) advance in funding this week. It had been expecting to draw down funds from an agreed £100M ($114.4M) investment that the government had agreed to put into the venture to build a battery Gigafactory in Blyth in Northumberland seen as part of the promised ‘levelling up’ process for the north of England. The manifesto pledge is thought to have helped swing the area from Labour to the Conservatives in the 2019 election.

However, the government rejected the funding request claiming the company had failed to meet targets for attracting other investors in the project expected to cost around £3.8Bn ($4.36Bn) to build a plant hoping to create 3,000 much needed jobs in the deprived area. Now existing company staff have agreed to take a “significant” pay cut this month in a bid to keep the company solvent. Executives at the firm will not take any pay at all for the month.

Yet, its prospects remain bleak because it has only raised enough money from an unnamed investor to keep going until early December.

Britishvolt chairman Peter Rolton told the Financial Times he was “confident” the company would be able to raise the cash in time. “We’re nudging along, we are improving the  position, but the interest is definitely there.” The newspaper said that Britishvolt previously said it needed to raise £200M ($228.8M) to keep the business running until next summer.
In a statement, the company said it was exploring “both short and long-term funding streams” to build its so-called gigafactory, with several “international investors” making approaches in the past few days.

“While the weakening economic situation is negatively impacting much business investment at present, at Britishvolt we are continuing to pursue positive ongoing discussions with potential investors,” the company added.

— Paul Myles is a seasoned automotive journalist based in Europe. Follow him on Twitter @Paulmyles_

 


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