An Australian company has been named as the preferred bidder to take over failed UK battery firm Britishvolt.
Start-up Recharge Industries was selected by auditors to buy the company, which had planned to build a £3.8 billion ($4.7 billion) plant in northern England that it said would create around 3,000 jobs.
Once considered the UK’s best candidate for a home-grown electric-vehicle battery supplier, Britishvolt was declared bankrupt last month after failing to identify any potential rescuers.
The deal is expected to be completed within the next week, administrator EY said.
“EY is pleased to announce that the joint administrators have entered into an agreement with Scale Facilitation Partners and its indirectly wholly owned subsidiary Recharge Industries Pty Ltd to be the preferred bidder in acquiring the majority of the business and assets of Power by Britishvolt Limited (in administration).
“This follows a process conducted by EY that involved the consideration of multiple approaches from interested parties and numerous offers received.
“Completion of the acquisition is expected to occur within the next seven days.”
Recharge Industries had submitted one of the two bids received for Britishvolt by the time the deadline for proposals had ended last week, sources said at the time.
The other bid came from a consortium of former Britishvolt investors.
The UK government backed the plans for Britishvolt’s gigafactory in January and said it would support the company with undisclosed funding, understood to be about £100 million.
However, the company has not yet received the funding.
It has faced uncertainty since last summer, when co-founder Orral Nadjari left the firm in July.
In the autumn it held urgent talks for more development funding until it could start production and generate its own revenue.
Recharge Industries is a subsidiary of Scale Facilitation Partners.
In addition to battery research and production through Recharge Industries, Scale Facilitation also invests in medical technology and artificial intelligence.
Recharge Industries is currently developing Australia’s first large-scale lithium-ion cell production facility, according to its website.
“After a competitive and rigorous process, we’re confident our proposal will deliver a strong outcome for all involved,” said David Collard, chief executive of Scale Facilitation and founder of Recharge Industries.
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Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
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