Britishvolt deal at risk of collapse over power supply contract

Recharge Industries’ attempt to buy the Britishvolt site is at risk of collapse due to a dispute between the Australian company and administrator EY over a power supply contract signed by the failed battery start-up, according to people familiar with the matter.

The Geelong-based business bought Britishvolt’s intellectual property — 23 staff and its prototype battery technology — for £8.6mn last month and under exclusive rights had until Friday to pay for the coveted land in Blyth, north-east England.

Recharge has yet to pay the £9.7mn for the land despite the deadline passing, and the deal is in jeopardy after the two sides hit an impasse over payments related to transferring a grid connection contract with National Grid, according to two people familiar with negotiations.

The setback adds to the scrutiny that EY is coming under for its dual role as strategic adviser to the firm during its life — resulting in it becoming the battery company’s fifth-largest creditor — and administrator upon its collapse.

EY said in a statement that the administrators “are not requesting that Recharge make any additional payments beyond those contractually agreed as part of the sale. The company will only retain funds, including any received from third parties, to which it is entitled to.”

Recharge believes it is entitled to receive a refund made by National Grid to the EY-controlled Britishvolt bank account since it must pay the equivalent amount to the UK electricity system operator, according to one person.

The collapse of Britishvolt and troubles for its successor have dealt a blow to the UK’s ambitions to foster an electric car industry and attract the battery plants that would form the cornerstone of it.

Battery manufacturing consumes a lot of electricity, making access to plentiful and cheap power vital for any factory. The Blyth site is widely considered one of the best in the UK and is the ultimate prize for Recharge Industries because it is located next to an interconnector that would supply clean and affordable power.

The opposition Labour party has pledged to provide £2bn to support the construction of eight battery gigafactories in the UK to sustain the country’s automotive industry if it were to form a government. However, the window for the UK to secure battery plant investments is rapidly narrowing as automakers make momentous decisions on where to locate their supply chain.

Founded in 2019, Britishvolt entered administration in January after limping between financing rounds without firm customer orders and running out of cash to build its envisaged £3.8bn battery plant.

Recharge Industries, which is run by former PwC partner David Collard, has threatened to walk away from buying the site if there is uncertainty over the status of its access to a grid connection, the people said.

Recharge Industries declined to comment.