Recharge Industries’ attempt to buy the Britishvolt site is at risk of falling through due to a dispute between the Australian company and administrator EY over a power supply contract signed by the failed battery startup, according to people familiar with the matter.
The Geelong-based company bought Britishvolt’s intellectual property – 23 employees and its prototype battery technology – for £8.6million last month and had to pay for the coveted land in Blyth in north-east England under exclusive rights until Friday.
Recharge has yet to pay the £9.7m for the country despite the deadline and the deal is in jeopardy after the two sides reached an impasse over payments related to the transfer of a grid connection agreement with National Grid, according to two people familiar with negotiations .
The setback adds to scrutiny that EY is under scrutiny for its dual role as strategic advisor to the company throughout its existence – leading to it becoming the battery company’s fifth-largest creditor – and steward after its collapse.
EY said in a statement that administrators “will not require Recharge to make any additional payments beyond those contracted as part of the sale. The company will only withhold funds, including those received from third parties, to which it is entitled.”
Recharge believes it is eligible to receive a refund from National Grid into Britishvolt’s EY-controlled bank account as it has to pay the equivalent amount to the UK electricity grid operator, according to one person.
The collapse of Britishvolt and problems with its successor have dealt a blow to Britain’s ambitions to promote an electric car industry and attract the battery factories that would provide the foundation for it.
Battery manufacturing consumes a lot of electricity, making access to plentiful and cheap energy vital for any factory. The Blyth site is widely regarded as one of the best in the UK and is the ultimate prize for Recharge Industries as it is next to an interconnector that would provide clean and affordable electricity.
The opposition Labor Party has pledged to provide £2billion to build eight battery gigafactories in the UK to support the country’s car industry if it forms a government. However, the window for the UK to secure investment in battery assets is rapidly narrowing as automakers make key decisions about where to locate their supply chain.
Britishvolt was founded in 2019 and entered administration in January after stalling between rounds of funding with no firm customer orders and running out of money to build its proposed £3.8 billion battery plant.
Recharge Industries, run by former PwC partner David Collard, has threatened to back off from buying the site if there is uncertainty about the status of its access to a grid connection, the people said.
Recharge Industries declined to comment. National Grid said it will continue to work with all parties to allow Recharge and EY to find a solution.
https://www.ft.com/content/e848d2ef-bbf3-46b4-bc29-c46c8e620990 Britishvolt deal at risk of collapse over power supply contract