Britishvolt buyer misses payment deadline, raising doubts about deal
Image credit: Britishvolt
The acquisition of British electric vehicle (EV) battery manufacturer Britishvolt has been brought into question after Recharge Industries failed to make the final payment.
EY, the administrators of Britishvolt, has claimed that Australian firm Recharge Industries has defaulted on its agreement after missing the final instalment of a total payment of £8.57m, which was due on 5 April 2023.
“The sale to the buyer had not been completed as the final amount of deferred consideration was due to be paid on 5 April 2023,” EY told creditors last week. “The buyer purchased the company’s business and assets for £8.57m. This amount was payable in a number of instalments.
“The final instalment remains unpaid and overdue. As a result, the buyer is in default of the business sale agreement.”
Recharge Industries has denied the accusations, stating: “We dispute we are in default.”
The Australian start-up agreed to buy the defunct battery maker in February after Britishvolt’s appointed administrators at EY made the majority of the company’s 300 staff redundant following the firm’s collapse.
Recharge Industries is owned and run by a New York-based investment fund called Scale Facilitation. The company has chosen to take over Britishvolt above investors due to its existing relationship with American lithium-iron battery developer C4V, removing the need to develop new technology.
In June, Scale Facilitation’s Australian offices were raided by the federal police as part of an investigation over alleged tax fraud. At the time, the company denied any wrongdoing and claimed the raid was the consequence of a “misunderstanding”.
Its founder and CEO David Collard told ITV that the missed payment on the Britishvolt deal is linked to a funding facility, “which, when closed, will also cover the cost of the land acquisition and provide additional working capital for the project”.
“The financier is in direct contact with the counterparties, and we anticipate closing in August following a period of significant due diligence,” Collard added.
EY has also revealed that Britishvolt owed between £130m and £160m when it went into administration. The biggest debt, of about £26.6m, is to DC Energy for manufacturing gear. The business also owes some £3m to HMRC and just under £280,000 to employees.
It is not yet clear how much might be paid back to those owed money by the failed firm.
Britishvolt was founded in 2019 and had ambitions of building a £4bn battery plant in Cambois, outside Blyth in north-east England, where it had hoped to employ up to 3,000 workers. In 2022 its future appeared bright, with the UK government pledging to provide financial support for the Northumberland gigafactory.
However, by October, it was said that Britishvolt had yet to receive any of the government’s promised funding, understood to be worth around £100m. The company collapsed in January 2023.
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