It is hoped that a last-minute bid for Britishvolt, which aims to build a facility to produce electric car batteries, would prevent it from going bankrupt.
The potential new bidder was identified as “a British consortium” by someone with knowledge of the situation.
The financially struggling business conducted a management meeting today and has rescheduled an all-staff meeting for Tuesday.
The shareholders have voted on who would assume responsibility for the £4 billion Northumberland battery plant construction project.
There were two previous proposals for the project in the Port of Blyth. One from an investment group with ties to Indonesia, with a dormant UK business and no track record in manufacturing. And the other from a small number of current investors hoping to prevent having their shares completely wiped out.
A takeover is estimated to cost roughly £30 million.
If none of the bidders can secure the support of 75% of the company’s shareholders, the company will be left cashless, and on the verge of insolvency, a fate it narrowly avoided at the end of last year thanks to an emergency lifeline extended by one of its investors, the commodity trading giant Glencore.
Observers of the industry have voiced dismay that a plant deemed crucial to the future of automobile manufacturing in this country is in such jeopardy.
The plant was also viewed as matching the government’s aim to promote prosperity in areas such as Northumberland. Also one that will assist guarantee more resilient supply chains in the United Kingdom.
Even if this new bidder is awarded the contract. It is unlikely that prospective consumers will order prototype battery technology from a business with no track record.
People familiar with the situation have privately voiced astonishment and dissatisfaction that the government has not had a more active role in molding the outcome of such an important project.
Other bidders?
Britishvolt requested £30 million of a promised £100 million in support from the government last year but was denied. Because the company had not met the required construction milestones to access the cash.
This request was followed by a request for £11.5 million, and then a request for only £3 million. According to government sources, this seeded seeds of grave uncertainty about the company’s survival.
Some government officials have voiced a willingness for the corporation in its current form to go bankrupt. So that more serious parties can assume responsibility for the project.
Tata, the Indian parent company of Jaguar Land Rover, Chinese business Envision, which owns the UK’s only existing battery plant in Sunderland for Nissan’s exclusive use, and a possible Korean manufacturer have been touted as candidates.
In the EU, 35 battery factories are in various phases of construction while efforts to begin building on this essential plant flounder.
It raises the question of whether the United Kingdom has or requires an industrial policy.
Former Business Secretary Greg Clark implemented a strategy in 2016, despite the Conservative Party’s traditional skepticism of overt government intervention in the private sector.
When Kwasi Kwarteng assumed control of the Department of Business, Energy, and Industrial Support (Beis). And subsequently the Treasury, the term was virtually outlawed due to its association with “picking winners.”
But at the time, Mr. Clark stated that the government did not need to pick winners. But rather consider strategic questions such as: Will we need more batteries, satellites, drugs, etc.?
In addition, the government needed to form assistance through grants and partnerships with academic and industrial organizations in sectors where the United Kingdom excelled and which the economy of the future would require.
Britishvolt hoping for last-minute rescue
Now, insiders at Beis claim they are not adhering to a certain plan. Regarding the current scenario at Britishvolt, one individual stated, “If they can raise capital privately. They should be permitted to do it.” While emphasizing that £100 million in government assistance was still available to whoever met certain building milestones.
In the interim, the clock is ticking. By 2026, the vast majority of a car’s value must be supplied from the UK or the EU to qualify for tariff-free export to the EU. Where the large majority of UK-made automobiles are sold.
Positively, it appears that everyone agrees that the Blyth location is ideal for a plant. Widespread industry and political support exist for its implementation. And it is anticipated that it will occur once substantial actors are involved.
However, industry experts assert that the United Kingdom would require at least four battery plants to support domestic automobile manufacturing, and they are currently despairing and frustrated with the chaotic developments at Britishvolt.
