Britishvolt and the proposed new battery factory in Cambois near Blyth has been national news again for the last couple of days.
Before Christmas it was reported that the company had been given about five weeks of funding from Glencore, one of its main backers, to find a route out of its financial crisis and avoid going into administration. To ease the burde,n employees took a voluntary pay cut, and the company’s ambitions to develop a similar battery plant in Canada were scrapped. Latest reporting confirms that a potential partner has been found, and a proposal has been circulated to shareholders recommending the majority sale of Britishvolt to an Indonesian-backed UK-based private equity investor. The proposal is to be discussed by the Board on Friday 13 January.
What is on offer to Britishvolt?
The Guardian outlines the offer as “the investors will pay £30mn for 95% of the business and … would then commit a further £128mn to fund the next stage in Britishvolt’s plan”. This would value the company, which includes the part developed site in Cambois, at around £32mn, somewhat less than the approximately £2bn which was claimed as a company valuation last year, before stories of extravagance and lack of finance began to leak into news media. The detail of the proposal is sparse but the company is currently carrying charges to Luxembourg-based investment company Katch Fund Solutions and HSBC UK Bank PLC, which are likely to be part of the settlement. The total package including the future finance is said to be around £160mn. Even if the UK Government’s promised £100mn remains on the table, Britishvolt will still require significant additional investment to cover the apparently billions of pounds needed to develop the factory before the first battery can be sold.
Britishvolt value tumbles
Britishvolt has had a bit of a chequered history since start-up at the end of 2019. The Swedish founder resigned at the end of 2020 following enthusiastic endorsement of Britishvolt from Boris Johnson, and revelations of historic fraud charges in his native Sweden. Another Swedish national, Mr Orral Nadjari became CEO and the major shareholder. In June 2022 Nadjari was tipped by Financial Times backed ‘Sifted’ to be one of Europe’s next Green Billionaires with his share of Britishvolt estimated to be £700 million.
However, less than two months later, reporting by the Guardian and others on leaked documents highlighted financial problems. The site construction was paused and put on ‘life support’ to try and control costs. Nadjari resigned as Director and CEO in August. Current company valuations probably make it unlikely he will achieve ‘Sifted’s predictions as his shareholding may be now worth less than £1mn. Other staff with shares and hopes that they too would become millionaires are likely to be equally disappointed. Perhaps unsurprisingly, Companies House data show that Britishvolt failed to meet its deadline at the end of the year for submission of accounts, which is potentially a criminal offence under the Companies Act 2006.
What about the proposed new Britishvolt owner?
If these proposals will secure the future of Britishvolt and promised new ‘green’ jobs at Cambois it will be good news for the North East. Since the inception of Britishvolt, doubts have been expressed about the ‘go it alone’ and ‘go from scratch’ approach without any guaranteed customer in such a complex and commercially difficult area. The lead time and investment necessary prior to the generation of any revenues was bound to put significant pressure on the success of development. It might be hoped, therefore, that the new owner would bring industry expertise and experience as well as finance to the company to ‘steady the ship’ for the difficult times ahead.
The Guardian notes that the “consortium is led by DeaLab Group, a UK-based private equity investor that has been involved in several fossil fuel and renewable energy transactions in Indonesia, and an associated metals business, Barracuda Group” Review of these companies in the UK is not reassuring. Indonesian banker, Reza Eko Hendranto is essentially the owner of the various entities listed at Companies House with names related to Dealab and Barracuda. There are three Dealabs and seven Barracudas.
Barracuda Crypto Ltd and Barracuda Trade and Vault Ltd have both been struck from the Register for non-submission of required documents. Barracuda Resources and Minerals Asia Ltd is under first notice of strike-off (usually when a business has failed to file accounts or annual statements). Barracuda Resources and Minerals Ltd was under first notice of strike off but on 9 January 2023 changed its name to Barracuda Energy Storage Ltd (presumably to prepare for a new role in battery production), and submitted the required documentation to have the notice lifted. Barracuda Strategic Metals Ltd and Barracuda Group Ltd are both active, but without any indication in their accounts of actual business activity (costs or income).
Barracuda Group Ltd is the significant shareholder in Barracuda Strategic Metals Ltd and Barracuda Energy Storage Ltd.
Barracuda Group Ltd, and therefore presumably all three of these Barracuda companies, are owned by another Hendranto company called Dealab Capital Management. Dealab Capital Management Ltd started life optimistically as Wishbringer Ltd, before Hendranto took over and changed the name in August 2020. It had a nominal value of one pound. Unfortunately, Dealab Capital Management Ltd was put into compulsory dissolution in July 2022. The Companies House Notice states: “Upon the company’s dissolution, all properties and rights vested in, or held in trust for, the company are deemed to be bona vacantia and belong to the Crown.”! Dealab Asset Management Ltd was similarly put into compulsory dissolution in July 2022.
Dealab Group Ltd has twice been under notice of compulsory strike off in the last two years and while it is the only Dealab company currently active, submitted accounts show no record of any actual business activity.
What happens next?
The Dealab proposal will apparently be discussed by the Britishvolt Board on Friday 13 January. There is also a belief that if the deal is not accepted then administration may be the only option. Everyone in the North East wants the battery factory to succeed, but Hendranto’s corporate administration history struggles to bode well for his competence in the management of a 95% stake in such an important and complex undertaking. Hopefully it’s not another case of smelling British taxpayer’s cash and expecting to make a quick profit on the back of it. Government can get more involved and surely do better than this. Mirroring these concerns the Financial Times is also now reporting that “Britishvolt shareholders pitch rival bid to thwart Indonesian takeover”. Perhaps we can take heart in the Guardian quote on Britishvolt by Ian Constance, chief executive of the Advanced Propulsion Centre, one of the bodies involved in awarding government funding to projects:
“They are still in the race and the reason they are still in the race is that they have some excellent technology that has been developed by UK expertise.”
Whatever the outcome the prospect looks black for Friday, with a best hope for some lighter shades of grey.