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Britishvolt collapsed owing about £160 million to unsecured creditors who are unlikely to see a significant dividend from the company’s insolvent estate.
The battery start-up fell into administration in January after failing to secure emergency funding.
It had planned to build a gigafactory on the Northumberland coast but struggled to raise equity investment for its research and the development of its sites.
Grant Shapps, the business secretary, also did not allow Britishvolt to draw on £30 million of bridging finance from the government’s Automotive Transformation Fund because the company had failed to meet key milestones.
Britishvolt was then sold to Australian firm Recharge Industries, which is run by the New York-based investment fund Scale Facilitation.
Advisers at EY have been managing Britishvolt’s administration and have been collecting claims from creditors. They have said Recharge would need to spend up to £6 billion to develop the gigafactory in Northumberland.
Recharge has picked up Britishvolt’s battery technology and will decide whether to buy the site before the end of this month.
Britishvolt raised equity finance of £167.5 million in a series of fundraising rounds between late 2020 and the summer of 2022.
The company completed its largest fundraising of £84 million in July 2022 shortly before it emerged it would need to minimise spending to stay afloat.
Glencore, Ashtead and Turnwave Investments also provided total debt financing of £33.8 million between August 2021 and November 2022.
Britishvolt started to negotiate payment plans with suppliers and creditors and deferred non-essential spending when it struggled to raise equity funding during the summer of 2022.
The administrators have now indicated that unsecured claims will lie between £130 million and £160 million but that the final figure could be “materially higher or lower” depending on how many claims are ultimately received and whether they are deemed valid.
EY’s report said: “It is too early in the administration to advise whether or not there will be sufficient funds available to enable the payment of a dividend to non-preferential creditors.
“Should it be possible to pay a dividend to non-preferential creditors, subject to future realisations and the costs of the administration process, the joint-administrators currently expect any dividend to equate to less than 1p in the pound.”
