Britishvolt began planning for a possible insolvency as early as last summer, according to newly released documents that show the battery start-up owed up to £160mn to unsecured creditors when it collapsed in January.
EY — which advised the battery group on its business strategy — said it expected to rack up £3.5mn in fees running the administration process, a sum likely to draw further scrutiny over the Big Four firm’s dual involvement.
Britishvolt collapsed in January after months limping between lifeline financing rounds, and has since been sold to Australia’s Recharge Industries for just £8.6mn.
The documents released by EY on Tuesday reveal the huge debts incurred by the UK’s hope for a national battery champion as its plans to raise £800mn fell flat last year.
Britishvolt called in a team from EY in August to do “liquidity analysis and high-level contingency planning work to understand its potential restructuring and insolvency options as a fallback plan”, the documents show.
It launched an official hunt for a rescue buyer a month later, becoming mired in a constant search for short-term funds before finally bowing to financial pressure in January.
It collapsed owing between £130mn and £160mn, a sum close to the £167.5mn in funds it had raised in equity — and spent — since it was founded in 2019. The company had just £1.8mn on the day it folded.
Among unsecured creditors, who the administrators expect to receive a payout of less than 1p in the pound, Britishvolt owed more than £10mn to a plethora of consultants and advisers including £2.9mn to McKinsey and £1.4mn to AlixPartners. Before taking on its role as administrator, EY was already owed £4mn as an unsecured creditor for its work advising the company.
Despite developing its own in-house technology, the business had no registered intellectual property when it failed.
The filings also lay out the scale of the challenge facing new owner Recharge Industries if it is to develop a battery gigafactory at the failed company’s Northumberland site.
“It is estimated that any purchaser would need access to significant financing in the range of £3bn-£6bn to fund the capital expenditure required to complete the development of the gigaplant,” the EY report stated.
The filings added that any new owner would probably have to reapply for a £100mn grant that the UK government had pledged to Britishvolt to build a battery plant it estimated would cost £3.8bn. The company owes an estimated £5.4mn in tax to the UK government.
Among Britishvolt’s largest creditors was London-listed commodities trader Glencore, which was owed £26mn in loans and convertible notes. Two battery plant equipment suppliers — Germany’s DC Energy, which says on its website that it won a £100mn order from Britishvolt, and South Korea’s Hana Technology — are each owed more than £20mn.
The creditor list includes a range of outstanding payments sustained by the business, from £276,000 for its high-profile booth at the Festival of Speed racing event and £26,700 to LinkedIn, to £2,900 to a taxi company in Chichester and just £2 to mobile provider Vodafone.
Law firm Dentons was owed £3.8mn while Ridge & Partners, a property and construction consultancy, had £1.5mn of unpaid fees. The University of Warwick was owed more than £1mn while £843,000 in bills from National Grid were outstanding.
The company also owed £509,000 to The Chadlington Consultancy, owned by former Britishvolt director Lord Chadlington and his wife.
Recharge Industries was given an extension until the end of this month to pay £9.7mn to secure the land in north-east England.
EY said that given its own status as an unsecured creditor, it planned to hire another firm to run the liquidation of the company in future in the event there was enough cash to make any payment to unsecured creditors.