UK (Parliament Politic Magazine) – An Australian firm that acquired the struggling battery manufacturer Britishvolt has reportedly neglected to compensate its UK employees for the past four months, according to information obtained by the media.
Recharge Industries assumed control of Britishvolt following its entry into administration in January. The transition has encountered significant challenges, with approximately £2.5 million of the purchase price remaining unpaid, well past the due date.
Recharge Industries Faces Employee Payment Delays Amid Britishvolt Acquisition
Nevertheless, insiders from Recharge Industries remain confident that they are on the verge of finalizing a deal with a new investor. Britishvolt, initially a promising startup with grand aspirations, aimed to construct a £4 billion “gigafactory” to produce battery packs for the next generation of electric vehicles.
The facility was planned for the location of an old power station near Blyth in Northumberland, strategically situated with a deepwater port and excellent transportation access.
However, the venture faced financial difficulties and entered administration earlier in the year. Following a review of several bids, the administrators at EY agreed to transfer Britishvolt’s assets to Recharge Industries for a sum of £8.57 million. EY has confirmed that £6.1 million was received upon the initial completion of the transaction, but the outstanding balance remains unpaid.
Although most of Britishvolt’s workforce was made redundant upon the company’s entry into administration, 26 employees were retained.
Background on Recharge Industries and Scale Facilitation
Recharge Industries, a startup venture under the ownership of Scale Facilitation, a New York-based investment firm led by financier David Collard, has not issued any official statements regarding the allegations.
Recharge Industries has outlined its intentions to utilize the Blyth site for the production of vehicle batteries designated for the Australian military. To gain control of the land, the company not only needs to remit the outstanding £2.47 million to EY but also must secure an additional £11 million to settle a financial claim held by property investor Katch on the site.
Insiders at Recharge Industries remain optimistic, asserting that funding from a new investor is imminent and could pave the way for the deal to proceed by the middle of the following week. However, Britishvolt employees appear skeptical about the likelihood of this transpiring.
“We’ve been hearing similar promises repeatedly since August,” stated one employee. “He keeps assuring us there’s an eager investor, but he can’t disclose their identity. It’s the same narrative every time.”
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Another employee dismissed Mr. Collard’s claims as unfounded. David Collard maintains his determination to prove his detractors wrong, but he faces an urgent and challenging task ahead.
Another staff member indicated that they were willing to grant the entrepreneur additional time to secure the new investment. Evidently, Recharge Industries has encountered significant challenges in securing the necessary funding.
One contributing factor to this difficulty can be linked to a tax investigation carried out by Australian federal police at the local offices of Scale Facilitation. When the raid occurred in June, sources with ties to Mr. Collard, a former partner at the prominent accounting firm PwC, asserted that the tax investigation was a result of a misunderstanding.
The misunderstanding was due to the interplay between US and Australian tax filings, and all parties were cooperating. Scale Facilitation firmly denied any wrongdoing. Nonetheless, this incident markedly dampened investor confidence in involvement with the Britishvolt project.
Another critical obstacle has been the presence of a buyback clause held by Northumberland County Council, the original landowner. This provision allows the council to repurchase the Blyth site if substantial progress is not made on its development by December 2024.
The BBC has learned that there are considerable reservations within the upper echelons of Northumberland County Council regarding Mr. Collard’s financial and industry credentials to deliver on a project seen as a potential source of thousands of jobs, both directly and within the supply chain.
In the midst of this, EY has defended its own role in the situation, emphasizing that the £6.1 million already received from Recharge Industries surpassed the value of the next most viable, feasible offer presented to the Joint Administrators