Britishvolt has landed a lifeline contract that will provide the battery start-up with enough money to go until early December, saving the company from bankruptcy.
He said that while company officials are working without pay for the month of November, employees have agreed to take a “substantial” salary cut to stretch the money farther.
According to chair Peter Rolton, the group has received funding from an anonymous investor to cover operations for an extra five weeks.
However, the association still forces the company, which aims to build a £3.8 billion battery gigafactory near Blyth in the north-east of England, to secure long-term funding in the next weeks or face the resurrected possibility of bankruptcy before Christmas.
He noted that the company is in discussions with a number of potential supporters, including two “strategic” corporate players and a few traditional investors. He said, “We are making progress, and we are strengthening our position, but the interest is unquestionably there.
Rolton said he was “sure” Britishvolt would be able to raise the additional monies required in a timely manner.
The company was preparing to enter administration on Monday after exhausting its cash reserves, but throughout the day, talks with its temporary saviour progressed.
Rolton noted that the source of the new investment, which was announced on Wednesday, sought confidentiality in exchange for donating the funds.
Britishvolt’s current key investors include commodities giant Glencore, industrial equipment company Ashtead, and Cathexis, a financial vehicle owned by Texas billionaire William Harrison that also owns the project’s contractor ISG. According to two people familiar with the conversations, the amount raised on Tuesday was in the low one million pound range.
Britishvolt had stated that it needed to raise £200 million to keep the business operating through the summer of 2019.
According to a person familiar with the business, an administration would have been likely to wipe out unsecured creditors by giving them around 5 pennies in the pound. The company, which was established three years ago, created its own battery expertise, which it supplied to a few automakers in September. However, the group has been having trouble raising money this year due to the collapse of market conditions and is still months away from collecting agency orders.
The startup doesn’t expect to begin generating significant income until the middle of the previous decade. It has relied on investor finance to cover its around £3 million monthly salary bill. Due to the market volatility and Russia’s invasion of Ukraine, potential funding has dried up this year.
Rolton noted that only last week one significant investor withdrew, while others who were ready to invest held off because of the political unrest in the UK.
- Britishvolt Obtains A Lifeline Of Financing For Five Weeks
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