Power by Britishvolt Limited

Collapsed startup lithium-ion battery manufacturer Power by Britishvolt has been acquired by Recharge Production UK Limited (“Recharge“) for approximately £8.6 million, after the company fell into administration on 17 January.

Power by Britishvolt was incorporated on 31 December 2019 with the intention of developing sustainable, high-performance battery cells for the automotive and wider transportation sectors, as well as developing and operating the UK’s first Gigaplant site for the production of battery cells in Cambois, Northumberland (at a site owned by its subsidiary, Power by Britishvolt Properties Limited (“BVP“)). The project was valued at £3.8 billion.

Following their appointment, Joint Administrators Dan Hurd, Joanne Robinson and Alan Hudson of EY conducted an accelerated sale process for the company’s business and assets, resulting in interaction with 88 interested parties. 32 parties were provided access to the virtual data room, and 12 parties submitted initial non-binding offers on 24 January.

The Joint Administrators reviewed the offers and shortlisted six interested parties to proceed to the next phase of the sale process, which allowed them to undertake more detailed due diligence.

During this phase of the sale process, it became evident that any sale of the business would be influenced by certain challenges including, amongst other issues:

• the working capital requirements for the business going forward, in addition to the funds required to ultimately build the planned Gigaplant;

• the existence of a clause allowing the Northumberland County Council to buy back site for the proposed Gigaplant for £4m plus VAT, subject to certain trigger events; and

• £9.7m owed to Katch Fund Solutions (“Katch“) by BVP and guaranteed by the company. Katch holds security over the shares of BVP owned by the company and certain land and assets held by BVP. It has enforced its security over the land at Cambois held by BVP and appointed representatives of Begbies Traynor as fixed charge receivers over it in early November 2022.

As a result of these and other issues, a number of the final bidders included conditions in their offers that were either unacceptable or outside the control of the company or the Joint Administrators to satisfy.

Following a review of the final offers and further communications with interested parties, the Joint Administrators decided to proceed with the offer received from Recharge, a newly incorporated subsidiary of Scale Facilitation Partners LLC. This decision was principally based on the value of final offer received, the level of diligence done and an assessment of the ability of the purchaser to transact quickly, thus reducing risk and preserving value. The sale ultimately completed on 26 February.

The transaction involved the Joint Administrators selling the company’s business and substantially all of its assets to Recharge for £8,576,343, which was materially above the next best alternative. Recharge has also agreed to acquire the company’s shares in BVP, the entity that owns the Gigaplant, but it will need to settle the £9.7m debt owing to Katch to do so.

The Joint Administrators have also confirmed that the government’s £100m grant to help develop the site was terminated when the company entered administration, meaning Recharge will likely need to make a new application for grant funding.

The Joint Administrators have been assisted by Dentons. Their Proposals can be found HERE.