Britishvolt plans to build an electric car battery factory in the UK. There is hope that it will be saved from administration by a last-minute offer.
According to sources familiar with the matter, the potential new bidder was described by people as “a British consortium”.
A manufacturer in financial trouble has called for an all-staff meeting to be held on Monday.
Shareholders have been voting to decide who will be taking over the project to build a £4bn Northumberland battery plant.
Two bids were submitted for the Port of Blyth project. One was from an Indonesian investment group, which has a dormant UK affiliate and no track record of manufacturing. The other was from a small number of investors who wanted to keep their shares from being completely wiped out.
A buyout is expected to cost approximately £30m.
If no bidders are able to secure support from 75% shareholders, the company will be insolvent and headed for administration. This would happen after the company was granted an emergency lifeline by Glencore, a commodity trading giant.
Industry watchers expressed concern that this plant, which is considered vital for the future of car manufacturing in this country, should be in such a delicate situation.
It was also seen to be a response to the government’s goal of creating prosperity in Northumberland and one that will ensure more resilient supply chains within Britain.
Even if the new bidder wins, it is still uncertain that potential customers will be willing to place orders for prototype batteries technology from a company without a track record.
People close to the situation expressed disappointment and frustration privately that the government did not take a greater role in shaping the outcome for such a critical project.
Are there other bidders?
Britishvolt requested the government last year to support £30m of the promised £100m, but was denied because the company hadn’t met the construction milestones required to be eligible for the funds.
According to the BBC, that request was followed up by another for £11.5m and then only £3m. Sources close to government say that this raised serious doubts about the company’s viability.
Some government officials have suggested that the company be liquidated in order to allow more serious players to take over the project.
Tata, India’s parent company of Jaguar Land Rover, Envision, a Chinese company that owns Sunderland’s only battery plant for Nissan, and a possible Korean manufacturer are some of the candidates mentioned.
Despite efforts to tackle this critical plant problem, 35 battery plants are still in various stages in construction throughout the EU.
This raises the question of whether or not the UK has an industrial strategy.
Greg Clark, former Business Secretary, put together a strategy in 2016, despite the Conservative Party being skeptical of the idea of government intervention in the private sector.
This term was associated with picking winners and was almost banned by Kwasi Kwarteng, who took over the Department for Business, Energy & Industrial Support and then the Treasury.
Clark stated that at the time, the government didn’t need to choose winners, but asked strategic questions such as “Do we need more batteries, satellites or pharmaceuticals?”
It was also required to create support via grants and tie ups with academic or industrial institutions in sectors where the UK excelled, and would be needed in the future economy.
Beis insiders say that they don’t have a specific plan. One insider at Britishvolt said that Britishvolt should be allowed to raise capital privately, while stressing the availability of £100m government aid to those who meet certain construction milestones.
The clock is ticking. To qualify for tariff-free export into the EU, most UK-made cars will be sold by 2026, the majority of the car’s value must be in the UK or EU.
Positively, everyone seems to agree that the Blyth site is ideal for a plant. It is supported by the entire industry and is likely to be approved by all parties.
Industry experts predict that the UK will require at least four batteries plants to power domestic car production. For now, they are frustrated by the chaotic developments at Britishvolt.