Britishvolt, a battery startup, is currently in negotiations with an Indonesian oil and gas investor to reach a £160m rescue agreement that would nearly wipe out existing shareholders’ stakes.
DeaLab Group, a UK-based equity investor, is the leader of the investor consortium. He has been involved in numerous fossil fuel and renewable energy transactions for Indonesia and a related metals business, Barracuda Group.
If the project is completed, a takeover would be a welcome relief to employees. It would also allow the company to continue its ambitious efforts to build a factory that can produce 30 gigawatts of batteries per year, enough to power hundreds of thousands of cars. The UK government pledged £100m of financial support for the project in order to make gigafactories a priority.
Britishvolt’s Northumberland site is considered by many automotive professionals to be one of the best locations in the UK for a gigafactory. It is located near Blyth, Northumberland. This location has power lines that carry renewable energy and a deep-sea dock. The startup was forced to close its doors in October after running out of funds. Construction work had been halted since the summer.
The rescue deal stipulates that the investors will pay £30m to 95% of the company. This would leave existing shareholders, including Orral Nadjari, and FTSE 100 companies Glencore & Ashtead with 5% less than £2m. To fund the next stage of Britishvolt’s plan, the consortium would commit another £128m.
Somerley Capital, a Hong Kong-based corporate financial adviser, organized the deal. Britishvolt announced Monday that it is in negotiations with unnamed investors to resolve weeks of uncertainty about its future.
Britishvolt did not identify other investors backing the consortium. A spokesperson for Britishvolt declined to comment beyond repeating a statement that Britishvolt was in talks with investors about the possibility of a majority sale.
According to the startup, it hoped to attain the long-term sustainability and funding it needed to continue its current plans to create a viable UK battery cell manufacturing and R&D business.
Britishvolt’s board will discuss the takeover on Friday. It would however value the company at less that £32m. This is a far cry from last year when the company reportedly reached the “unicorn” status or a valuation exceeding $1bn (£820m).
Peter Rolton, the executive chairman, wrote to shareholders to ask for their support for the deal to avoid administration which would be “catastrophic” for everyone.
Rolton stated that the company’s top priority would be to build a scale-up facility in Hams Hall (Warwickshire), which would allow the company to both test its processes and potentially give it its first source for revenues.
Britishvolt stated that DeaLab was involved in several deals totaling more than $1bn, including links to Indonesia. These deals included the acquisition of oil, coal, and gas interests as well as telecoms and geothermal energy businesses.
According to a social media profile, Reza Eko Hendranto owns DeaLab Group and Barracuda Group. Hendranto is an Indonesian banker who used to work at JP Morgan’s US investment bank. Barracuda has partnered with an Indonesian partner to develop a project to extract nickel from battery metals.
DeaLab Group Limited is listed as a dormant business on the UK Companies Register. Its annual UK company accounts have not been filed. It is a crime to not file an annual report. This is generally a red flag for companies that have done due diligence. However, the maximum financial penalty for late filing of an annual report is only £1,500 in the case of a private company.
Fundraising was also a focus of Full Circle Capital and Lazard Capital, two investment banks.
DeaLab, Barracuda, and Somerley were contacted for comment.