Britishvolt, the UK government-backed battery startup looking to build a giant £3.8bn gigafactory in north-east England, is considering entering administration with the potential loss of almost 300 jobs.
The company could announce an administration as soon as Monday, with the accountancy firm EY lined up to carry it out if it goes ahead, two sources with knowledge of Britishvolt’s operations, told the Guardian newspaper's website.
However, one source cautioned that Britishvolt was also still examining other options. A Britishvolt spokesperson quoted by the Guardian said: “Company policy is to not comment on market speculation.”
Britishvolt was founded less than three years ago with the ambitious aim of building an enormous factory that would be able to supply batteries to carmakers and quickly became a flagship project for the UK automotive industry.
Former prime minister Boris Johnson's government promised the company £100mln in financial support, when the current prime minister, Rishi Sunak, was chancellor.
However, Britishvolt has not yet received the money, which was earmarked for tooling within the factory, which has not been bought as it had to put building work for its factory on “life support” to conserve cash. That was followed by several months of increasingly urgent talks with potential investors to help cover Britishvolt’s rapidly growing costs until it was able to start producing batteries and receiving its first revenues.
Britishvolt, which has acknowledged the financial difficulties, has blamed them on deteriorating market conditions after Russia’s invasion of Ukraine.
The company has managed to attract tens of millions of pounds of investment from prominent companies including miner Glencore PLC (LSE:GLEN) and equipment rental company Ashtead PLC. However, it has struggled to secure the next stage of investment, leaving it burning £3mln in cash a month to pay the salaries of 300 people, according to the Financial Times.