Little-known Indonesian-linked investor buys UK’s Britishvolt for £160m | Tech Sector

Battery start-up Britishvolt is negotiating a £160m bailout deal with an Indonesia-linked oil and gas investor that would all but wipe out the value of the stake held by existing shareholders.

The consortium of investors was led by DeaLab Group, a UK-based private equity investor involved in a number of fossil fuel and renewable energy deals in Indonesia, and a related metals business, the Barracuda Group.

The takeover of the project, if completed, would bring welcome relief to employees and allow the company to continue its ambitious effort to build a factory capable of producing 30 gigawatt-hours of batteries a year — enough to make hundreds of thousands of cars. Building a superfactory is seen as a key goal by the British government, which has pledged £100 million in financial support for the project.

Britishvolt’s plant near Blyth, Northumberland, is considered by many in the car industry to be one of the UK’s most promising gigafactories because of its proximity to power lines for renewable energy and a deep sea port. However, the startup was on the verge of closing in October after running out of money, and construction work on the factory has largely stopped since the summer.

Under the terms of the bailout deal, investors will pay £30m for 95% of the business – a deal that would see existing shareholders, including co-founder Orral Nadjari and FTSE 100 companies Glencore and Ashtead, holding holdings worth less than £5. % of business £2 million. The consortium will then commit a further £128m to fund the next phase of the Britishvolt programme.

The transaction was organized by Hong Kong-based corporate finance adviser Somerley Capital. Britishvolt announced on Monday that it was in talks with an unnamed investor, ending weeks of uncertainty about its future.

Britishvolt did not name the other investors backing the consortium. A spokesman declined to comment, repeating a statement confirming that “Britishvolt is in discussions with a consortium of investors regarding a possible majority sale of the company.”

The start-up has said it plans to achieve “long-term sustainability and the necessary funding to enable it to implement its current plans to establish a strong and viable battery R&D and manufacturing operation in the UK.”

Britishvolt’s board will discuss the takeover on Friday. However, it values ​​the company at less than £32m, a far cry from the coveted “unicorn” status or valuation of more than $1bn (£820m) it reportedly achieved a year ago.

Executive chairman Peter Rolton wrote to existing shareholders asking them to approve the deal to avoid administration, which would be “catastrophic for everyone involved”.

Ralton wrote that the company’s first priority was to complete a “scale-up facility” at Harms Hall in Warwickshire, which would allow the company to test the process and potentially supply it with the first Source of income.

Britishvolt said DeaLab had previously been involved in a series of Indonesia-related deals worth more than $1 billion. These include buying interests in oil, gas and coal, as well as geothermal energy and telecommunications businesses.

DeaLab and Barracuda Group are owned by Reza Eko Hendranto, an Indonesian banker who previously worked for U.S. investment bank JPMorgan, according to a social media profile. Barracuda is working on a project with an Indonesian partner to extract battery metals, including nickel.

DeaLab Group Limited is listed as a UK company and registered as a dormant company. Its annual UK company accounts are overdue. Failure to file an annual report is a criminal offense and is often seen as a red flag for companies undertaking due diligence, although for private companies the maximum fine for late filing is only £1,500.

Investment banks Lazard and Full Circle Capital are also working on fundraising.

DeaLab, Barracuda and Somerley were asked to comment.

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