Mystery Indonesia-linked investor replaces UK’s Britishvolt in £160m deal | technology sector

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Battery startup Britishvolt is in talks with an Indonesia-linked oil and gas investor for a £160m bailout that would nearly wipe out existing shareholder value.

The consortium of investors is led by DeaLab Group, a UK-based private equity investor that has been involved in several fossil fuel and renewable energy transactions in Indonesia, and Barracuda Group, an associated metals company.

Taking over the project, if completed, would provide a welcome relief to employees and enable the company to continue its ambitious efforts to build a plant capable of producing 30 GWh of batteries each year – enough for hundreds of thousands of cars. Building the megafactories is seen as a major goal by the UK government, which has pledged £100m in financial support for the project.

The Britishvolt site, near Blyth in Northumberland, is considered by many in the motor industry as one of the best potential locations in the UK for a mega-plant because of its proximity to power lines carrying renewable energy and a deep-sea port. However, the startup came to the brink of collapse in October as funds ran out, with construction work on the plant mostly halted since the summer.

Under the terms of the bailout deal, investors will pay £30m for 95% of the business – a deal that would leave existing shareholders including co-founder Oral Najari and FTSE 100 companies Glencore and Ashtead 5% of the business valued at less than £2m. The consortium then commits an additional £128m to fund the next phase of the Britishvolt scheme.

The deal was organized by Somerley Capital, a Hong Kong-based corporate finance advisor. Britishvolt announced Monday that it is in talks with unnamed investors to end weeks of uncertainty about its future.

Britishvolt did not name any other investors backing the consortium. A spokesperson declined to comment, other than to repeat a statement confirming that “Britishvolt is in discussions with a group of investors in relation to a potential majority sale of the company.”

The startup said it plans to achieve the “necessary long-term sustainability and financing to enable it to pursue its existing plans to build a viable and robust battery cell R&D business in the UK”.

Britishvolt’s board of directors is due to discuss the takeover on Friday. However, it would value the company at just under £32m, a far cry from last year when it was said to have achieved the coveted ‘unicorn’ status, or a valuation of more than $1bn (£820m).

The CEO, Peter Rolton, wrote to the existing shareholders asking for their approval of the deal to avoid management, which would be “disastrous for all concerned”.

Rolton writes that the company’s first priority will be the completion of an “expansion facility” at Hams Hall, Warwickshire, which will enable the company to test operations as well as give it its first source of revenue.

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DeaLab has previously been involved in a series of deals worth more than $1 billion, Britishvolt said, with links to Indonesia. These benefits included the purchase of oil, gas and coal, as well as geothermal energy and telecommunications companies.

DeaLab and Barracuda Group are owned by Reza Eko Hendranto, an Indonesian banker who previously worked at US investment bank JP Morgan, according to a social media profile. Barracuda is working with an Indonesian partner on a project to extract battery minerals, including nickel.

DeaLab Group Limited is listed in the UK Companies Register as a passive company. The British company’s annual accounts are in arrears. It is a criminal offense not to submit an annual report, and is generally seen as a red flag for companies exercising due diligence, although the maximum financial penalty for late submission is just £1,500 for a private company.

Investment bank Lazard and private investment and advisory group Full Circle Capital also raised the money.

DeaLab, Barracuda and Somerley have been contacted for comment.

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