Wall Street Times

Britishvolt seeks bid to stave off collapse

Image Source: Bloomberg

A company called Britishvolt wants to build a factory to make batteries for electric cars. There is hope that a last-minute bid will save the company.

People who know about the situation said that the new bidder might be “a British consortium.”

The company is having trouble making money, so all of its employees will meet on Monday afternoon.

Shareholders have been voting on who should take over the plan to build a £4 billion battery plant in Northumberland.

There were already two bids for the project at the Port of Blyth. One of them was from an investment group with ties to Indonesia and a dormant branch in the UK. They had never made anything before. The other came from a small group of investors who didn’t want their shares to lose all of their value.

People think that buying out a company would cost about £30 million.

If none of the bidders can get 75% of the shareholders to support them, the company will run out of money and go bankrupt. At the end of last year, this was almost what happened, but the big commodity trading company Glencore saved the day.

Industry watchers are upset that an important plant is putting the future of making cars in this country in jeopardy in this way.

The plant was also seen as part of the government’s “leveling up” plan, which aimed to make places like Northumberland more prosperous and help keep the UK’s supply chains stable.

Even if this new bidder wins, it’s unlikely that customers will buy prototype battery technology from a company with no track record.

People close to the situation have said in private that they are surprised and upset that the government hasn’t done more to shape the outcome of such an important project.

Potential bidders?

Last year, Britishvolt asked the government for £30 million of the promised £100 million in support. But the government said no because the company hadn’t reached the agreed-upon construction milestones to get the money.

The BBC thinks that what came next was a request for £11.5 million and then a request for only £3 million. Sources in the government say that this made a lot of people wonder if the company could stay in business.

Some people in the government would rather see the company go bankrupt so that more serious players could take over the project.

People have talked about Tata, the Indian company that owns Jaguar Land Rover, the Chinese company Envision, which owns the only battery plant in the UK and gives it to Nissan, and a possible Korean manufacturer.

Even though this important plant has yet to move forward, 35 battery plants are being built in different stages in the EU.

This makes you wonder if the UK has an industrial strategy or if it needs one.

Greg Clark, who used to be the Business Secretary, made a plan in 2016, even though the Conservative Party has always been against direct government involvement in the private sector.

People thought that the phrase was the same as “picking winners.” When Kwasi Kwarteng took over the Department for Business, Energy, and Industrial Support (Beis) and, later, the Treasury, it was nearly outlawed.

But Mr. Clark said at the time that the government didn’t need to pick winners. Instead, it should ask questions like, “Are we going to need more batteries, satellites, drugs, etc.?”

It also had to figure out how to help through grants and partnerships with academic and business institutions in areas where the UK was strong and where the economy of the future would need help.

People at Beis are now saying they don’t have a plan. One person said about Britishvolt’s current situation, “If they can get money from private sources, they should be allowed to do that.” However, they also said that the government would still give £100 million to anyone who met certain construction milestones.

In the meantime, time keeps passing. By 2026, most of the value of a car will have to come from the UK or the EU for it to be sold without tariffs in the EU, which is where most UK-made cars are sold.

On the bright side, everyone agrees that the spot in Blyth is a good place for a plant. A lot of people in business and politics want it to happen, and when important people are involved, it’s likely to.

But industry experts say the UK will need at least four battery plants to keep making cars there. So, they are upset and feel like there is no way out at Britishvolt.

Britishvolt to acquire gigafactory in Northumberland

The battery-making company Britishvolt is talking about a possible sale that could save a factory in Northumberland.

The company has been working on plans to build a £3.8bn plant in Cambois where batteries for electric cars will be made.

Read Also: COVID cases touches over 900 million people in China 

But it has already been close to failing, and the 18-month delay in production means that it won’t start up again until the middle of 2025.

More than 3,000 people will likely work at the plant.

If Britishvolt sold the factory, it could keep building it up until it could start making money by selling batteries to car companies.