UK bailout deal set to cut battery maker’s valuation by 90%

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A bailout of Britishvolt by an unknown Indonesian investor values ​​the ailing battery startup at just £32m, more than 90 per cent less than last year, according to two people familiar with the proposed deal.

The people added that the main investor in the buyers’ consortium is DeaLab Group Limited, a London-based financial group with close links to Indonesia.

However, the proposed £158m funding offer, which will keep the startup viable this year, puts the new potential owners on a collision course with existing shareholders, who will be nearly wiped out by the deal.

They are expected to receive as little as 13p in the pound, according to one shareholder, who asked not to be identified.

Three-quarters of existing shareholders, including FTSE 100 groups Glencore and Ashtead, must back the deal by Friday, according to two people.

The proposed bid would see DeaLab invest £30m for a 95 percent equity stake in the company, leaving the remaining shareholders with just 5 percent of the business between them, according to two people.

The new owners will then inject £128m over the remainder of the year, with the hope that the company can continue to operate until it receives its first battery orders from carmakers, which it expects later this year.

If the deal goes ahead, it would mean a sharp drop in Britishvolt’s valuation to £32m, down 96 per cent from the £774m valuation during the financing agreement last February.

There is no alternative to the offer from DeaLab, three people familiar with the talks said, leaving little prospect that Britishvolt would still be solvent if shareholders refused to back the deal.

The company, set up in 2019, has been promised £100m in funding from the UK government, but construction work must begin at its site in Blyth, Northumberland, where the £3.8bn giga-pound plant is due, to unlock funds, according to the report. It was mentioned by two people who have knowledge of the financing agreement.

DeaLab’s website claims it is a “global strategic investor advisor” and has “a portfolio of projects and various assets in development . . . ranging from a $300 million energy infrastructure development to a $900 million acquisition of a gold producer and a billion dollar power generation project.”

It adds that the company has “successfully secured commitments of more than $15 billion in acquisitions, disposals, and investments across more than a dozen projects and assets in three geographies globally, with a strong focus on Southeast Asia.”

The accounts of its UK entity, DeaLab Group Limited, are past due, according to Companies House, while the latest filing in 2021 alleges the business is dormant with assets of just £5m.

The business is controlled by Reza Eko Hendranto, an investment banker based in Jakarta, Indonesia, who worked at JPMorgan in New York between 2005 and 2011, according to his LinkedIn profile.

He is also listed as the founder of the Barracuda Group, a nickel producer and battery technology provider which is also participating in the Britishvolt bid.

DeaLab did not immediately respond to a request for comment posted on its website on Tuesday morning. Hendranto did not immediately respond to a request for comment.

In addition to its Blyth site, Britishvolt also plans a smaller facility at Hams Hall in Warwickshire that will allow it to start producing cells before its main plant comes online, which is not expected until at least 2025.

Domestic battery technology has been developed, but its commercial viability has not yet been proven.

Many of Britishvolt’s largest investors are also part of the company’s management and early staff.

The largest investor is founder Oral Najari, who left the business last summer, followed by Cathexis, the private equity firm of William Harrison, which owns project contractor ISG.

Glencore, which has previously invested in the company and provided lifeline financing as Britishvolt teetered on the brink of bankruptcy in November, declined to comment on the deal or its voting intentions.

Britishvolt said on Tuesday that “we cannot confirm market speculation as to the name of the party involved” and reiterated that “the parties will provide further details in due course and have nothing to add at this stage.”

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