By Millie Turner
Beleaguered battery firm Britishvolt has secured last minute funding to keep it afloat another few weeks.
The company, which has been developing a massive £3.8bn gigafactory in north-east England, has been locked in emergency fundraising talks for several weeks – pushing to raise £200m, or sell the company outright.
The lagging firm is a sign of the UK’s falling status as a leader in technology on the global playing field, as competitors charge ahead in the electric vehicle revolution.
However, the company said in a statement today that it has received “promising approaches” from several overseas investors in the past few days.
“Five weeks is a very short lifeline, and this funding is just first aid. If the money runs out before longer term investment has been secured then the directors are going to be back where they started, facing administration,” Tim Symes, insolvency lawyer and partner at Stewarts, Tim Symes, said.
“The directors will have been warned by their lawyers and insolvency specialists that the moment they run out of viable options for preventing the company from falling into formal insolvency, they have to take active steps to make that happen, and quickly. Or they could face personal exposure.”
James Beatton, partner at Cripps, added: “Typically, the last thing a lender would look to do is lend further funds to a severely distressed business. In this case the lender and the directors of Britishvolt will be confident that the with additional time bought by the funds they can ensure a more positive and controlled outcome than if the business went into an insolvency process now.
“So the fact that Britishvolt is taking on extra funding at this stage should probably be seen as a positive sign.”
Britishvolt, backed by London-listed Glencore, was first reported to be on the brink of collapse on Monday, by the Financial Times.
City A.M. understands it requested £30m in advanced funding from the government at the start of the week, which was rejected by Downing Street.
Employees have since agreed to a voluntary pay cut for November to help reduce costs.
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