Britishvolt secures five-week £5m funding bailout from Glencore

Britishvolt has secured a lifeline from commodities trader Glencore, giving the battery start-up enough cash to last through early December and pull the company back from the brink of bankruptcy.

Glencore, one of Britishvolt’s main investors, has provided the company with less than £5million, people familiar with the matter have told the FT.

The group has raised enough money for five more weeks of operation, chairman Peter Rolton told the Financial Times, without confirming the source of the new investment.

Employees have agreed to take a “significant” pay cut in November to drain the cash while company executives work for the month without pay, he said.

But the agreement leaves the startup, which has a $3.8 billion battery gigafactory,

Rolton said he was “confident” that Britishvolt would be able to raise any additional funds needed in a timely manner.

The company is in talks with several potential backers, including two “strategic” industry players and a handful of traditional investors, he added. “We’re pushing, we’re improving the position, but the interest is definitely there,” he said.

The company had been preparing to file for bankruptcy on Monday after depleting its cash reserves, but talks with its short-term savior developed later in the day.

Britishvolt’s current significant shareholders include Cathexis — an investment vehicle owned by Texas billionaire William Harrison, which owns Project ISG’s contractor — as well as commodities giant Glencore and industrial equipment group Ashtead. The largest shareholder is the founder and former CEO Orral Nadjari.

In the UK, Glencore is also planning to convert its lead refinery in Northfleet, outside London, into a battery recycling facility. Production waste from battery factories is the main source of recycling raw materials.

Glencore’s original investment in Britishvolt was led by David Brocas, the commodities giant’s former head of cobalt trading, who left the company in October.

Britishvolt previously said it would need to raise £200m to keep the business going until next summer.

An administration would likely have wiped out unsecured creditors and handed them about fivep a pound, a person familiar with the business estimated.

Founded three years ago, the company developed in-house battery technology that shipped to a handful of automakers in September. But the group is months away from getting firm orders and has struggled to raise money this year due to the collapse in market conditions.

The start-up does not expect significant sales until the middle of the decade. It has relied on investor funding to meet its wage costs, which total around £3million a month.

Potential investments have dried up this year as a result of market turmoil and the Russian invasion of Ukraine.

Rolton said one major investor pulled out just last week while others had been ready to inject finance but held back because of political unrest in the UK.

As the company sought additional government support over the past seven weeks, the prime minister had changed twice, as had the business secretary.

Rolton, a former government energy adviser, and Chief Executive Graham Hoare, a former Ford executive, have yet to meet current Business Secretary Grant Shapps, who has been in office for a week.

Britishvolt’s hopes of immediate government financial support were dashed on Monday after Shapps wrote a letter rejecting the company’s request for £30million support.

The group had argued that it needed the money because it could not access the £100million being offered under the Automotive Transformation Fund until it started work on its Blyth factory.

https://www.ft.com/content/402a65a7-a722-4056-b2a9-167536c0418c Britishvolt secures five-week £5m funding bailout from Glencore

Adam Bradshaw

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