Britishvolt administrator EY has narrowed down the list of potential buyers of the UK battery startup fell to five suitors, with Australian peer Recharge Industries among the leading contenders.
A consortium of investors in Britishvolt, which tried to save the battery maker before it went into administration this month, is among the other groups that have done so, according to three people familiar with the matter.
EY is under pressure to wrap up the sale of the company’s intellectual property and land package by the end of the month after receiving an indicative offer on Tuesday. The chosen bidder was told it had been chosen on Thursday, according to the four people.
Britishvolt had planned to build a £3.8bn gigafactory in Blyth, north-east England, which would be key to Britain’s electric car industry but went into administration this month after running out of cash.
If there is no deal by the end of January, the site will be sold free of its intellectual property, which includes battery technology, and 26 Britishvolt staff.
Recharge Industries, which also plans to build a battery factory in the Australian city of Geelong, has made an offer of around £30m. It has shown evidence of funding to EY and executives from the company visited the Blyth site on Friday, according to two people familiar with the matter.
The Australian company was launched in 2021 by Scale Facilitation, a New York-based investment vehicle that has backed several start-ups in the medical technology and green energy sectors.
With only five days to go, EY is working on the deal to evaluate the value it offers to creditors and how much the deal can pay off the main debtors and then work on new business.
Setting up the business will be complicated for buyers because of the huge cash flow costs required to take on Britishvolt’s strategy or re-imagine it from scratch, adding to the challenge for EY in determining whether bidders have access to sufficient funds.
26 staff were retained, from a previous workforce of 300, including many highly paid battery experts.
Before it went into administration this month, the company was seeking to raise around £200m in funding to keep it running until the end of this year, when it expects to receive orders from carmakers.
Britishvolt’s in-house technology is in the final prototype stage and needs more funding to commercialize it. The few automakers and battery experts that have tested their products have rated them favorably, and Mercedes-Benz placed a small order with the business last year, according to the two people.
Buyers who demonstrate they have sufficient working capital will hope to receive the £100 million in funding that the British government previously promised to Britishvolt, although the buyer will eventually have to ask for the money back, according to two people familiar with the process. . The agreement on the site in Blyth requires it to be used for battery facilities.
EY declined to comment.
Sabic, the Saudi Arabian petrochemicals company controlled by state oil group Saudi Aramco, has expressed interest in Britishvolt but has yet to make a formal offer, according to two people familiar with the matter. Sabic did not respond to a request for comment.
Additional reporting by Michael O’Dwyer and Thomas Wilson in London