Thursday, July 18, 2024
HomeBusinessBritishvolt scraps plan for second factory in Canada

Britishvolt scraps plan for second factory in Canada

Troubled startup battery maker formally abandons long-shot plan to build 60GWh plant in Quebec

Battery startup Britishvolt has formally abandoned a long-shot plan to build a second factory in Canada, as it focuses on securing new funding for its struggling UK project.

Britishvolt’s main project is an attempt to build a factory near Blyth in north-east England capable of producing batteries with a capacity of 30 gigawatt hours (30GWh) every year.

That effort has run into serious financial difficulties, with Britishvolt now looking for millions of pounds of new investment to continue operating after narrowly avoiding administration earlier this month. The struggles have been seen as a serious blow to the prospects for the UK car industry.

However, Britishvolt has in recent weeks expressed confidence it can find a new source of funding. It has also promised to return most of its staff to full pay in December, although top executives will still forgo their pay, people with knowledge of the situation said.

Despite the ambitious scope of its UK plans, the company also had broader ambitions, including a nascent effort to build an even bigger 60GWh plant in Quebec. In a sign of its intent the company hired Philippe Couillard, the former premier of the Canadian province, to lead that effort. He stopped working for Britishvolt in October, according to a social media profile.

The Canadian operation was always tiny, with only three employees registered to an office in Montréal, but it was seen by some people inside Britishvolt as one example of an extravagant approach to managing a startup. Couillard held two meetings with Canadian officials in an attempt to win government funding for the construction of a battery manufacturing plant in Canada, according to a public register.

A Britishvolt spokesperson said it was still hoping to return to North America at some point. Ending the operation was a “difficult decision to take given the growing interest from potential battery cell customers in Canada, the positive engagement of the Quebec government, and the important role the country plays in the North American auto and aeronautical sectors,” he said.

The UK parent company was saved this month in a last-minute injection of cash by Glencore, a FTSE 100 commodities trading company which is also a Britishvolt shareholder.

Glencore’s latest investment was thought to be less than £5m, a sum that was expected to last the company only five or six weeks. However, it is now thought that Britishvolt could continue operating until the new year after reducing costs, including the pay cuts.

Yet creditors still want to protect their interests. One of Britishvolt’s lenders, Luxembourg-based investment company Katch Fund Solutions, this month appointed a receiver to its property subsidiary. Britishvolt said the move only related to a minority debt secured against the Blyth site, and that there were “positive discussions with the intention of refinancing a payout to the secured creditor within the coming weeks”.

There have been several visitors to the Britishvolt site in recent weeks to consider a purchase, although it is not thought that the talks, which are being dealt with by a tight-knit group of senior executives, have reached an advanced stage with any of the potential bidders.

Britishvolt is also having to adjust to the loss of several staff in recent weeks as the extent of its financial troubles became clear, according to two sources.

Couillard was approached for comment.

Source: The Guardian



Most Popular