Australian startup Recharge finalises deal to take over UK battery maker Britishvolt

The battery startup Britishvolt is in talks with an Indonesia-linked oil and gas investor for a £160m rescue deal that would almost wipe out the value of existing shareholders’ stakes.

The Australia-based company Recharge Industries will take over collapsed battery maker Britishvolt after finalising a deal with administrators late on Sunday in the UK.

The agreement revives hopes for the construction of a £3.8bn (A$6.7bn) “gigafactory” in northern England, the backbone of a plan to modernise the British automotive industry and supply the next generation of UK-built electric vehicles.

The deal was finalised three weeks after Recharge, an Australian company that sits under New York-based investment firm Scale Facilitation, was nominated as preferred bidder, placing a huge opportunity, and burden, on a startup yet to construct a project.

Scale Facilitation’s Australian-born founder and chief executive, David Collard, said that the factory and an associated supplier park, where components are manufactured, were still a focus.

“We’re working closely with one of the leading UK fund managers looking to team [up] on the development,” Collard said.

Recharge also plans to build a battery factory in Geelong, a former car manufacturing hub in Australia, free from Chinese and Russian materials.

Britishvolt was planning to build its 30GWh factory in phases to take advantage of rising EV demand ahead of the UK’s 2030 ban of new petrol and diesel cars. The plant, located near Blyth in Northumberland, was expected to employ about 3,000 people when operating at full capacity.

It had £100m in conditional financing from the British government, but failed to meet various hurdles.

Britishvolt collapsed last month after running out of cash, with its demise partly blamed on the considerable sums it spent on battery technology and research. Part of Recharge’s pitch was focused on its existing relationship with American lithium-iron battery developer C4V, removing the need to develop new technology.

The completion of the deal with administrators EY was first reported by the BBC. It means that the revived Britishvolt could make batteries using Australian minerals, including lithium, US technology and British manufacturing, representing the same three countries in the Aukus trilateral security pact.

Collard said the company would initially focus on “developing a robust UK-specific business plan with global alignment”.

Recharge has flagged interest in producing batteries for energy storage and the defence industry, which differs from Britishvolt’s original aim of making power batteries for 300,000 vehicles a year.

Recharge’s bid won support from the British government’s trade envoy for Australia, the former England cricketer Ian Botham. It beat offers from existing Britishvolt investors, private equity firm Greybull Capital and the HSBC-backed Saudi British Bank.

The UK will need 10 high-volume battery manufacturing facilities, or gigafactories, by 2040 according to British research body The Faraday Institution. It currently has one, a Chinese-owned battery plant next to the Nissan factory in Sunderland, and lags behind many European nations.

The future of car manufacturing is tightly linked to battery production, as automotive brands look to bring the production facilities together. China is the world’s dominant EV battery maker.