Blow for the City as UK-based Electric car battery maker Britishvolt eyes US float
Electric car battery maker Britishvolt could go public in the US in another blow to the London Stock Market.
The company, which is building the UK’s first giant battery factory in Northumberland, is weighing up whether to list on Wall Street through a special purpose acquisition company (Spac) deal.
This means it would be taken over by a type of investment vehicle known as a Spac, which would allow the company to skip the usual hurdles in a traditional float.
Gigaplant: An artist’s impression of the British Volt factory in Blyth, Northumberland which is currently under construction
Britishvolt is keen to raise money through the stock market to help fund its £2.6billion Gigafactory that will employ around 3,000 people.
But bypassing London would represent a major loss for British investors who are keen to back one of the flagship projects in the UK’s green industrial revolution.
Britishvolt is a central part of Prime Minister Boris Johnson’s eco plans and will help the country stay at the forefront of the electric car market – as well as lessening the reliance on foreign battery makers.
Britishvolt is planning to start producing batteries in 2023. The company has hired bankers, Barclays and Guggenheim Capital, to investigate a Spac merger and the deal could happen by the end of June.
Britishvolt is aiming to raise as much as £100million this month in a funding round, which Barclays is advising on.
Although it has not signed up any car makers as customers yet, its services will be in high demand because the UK has banned sales of new petrol and diesel cars by 2030.
Ministers have set aside £1billion to help build battery factories and Britishvolt has applied for some of that cash and is waiting to hear back.
Brtishvolt co-founder and chief executive Orral Nadjari said the company has had ‘fruitful conversations’ with the Government and added that state funding ‘is critical for large industrial investment such as Britishvolt’.
A surge in Spac mergers has led to the biggest boom in deal-making since 1980. Takeovers and tie-ups worth £1 trillion were agreed during the first three months of the year, according to data from Refinitiv.
Spacs are similar to cash shell companies – they are listed groups that have cash available with the express intention to buy firms.
This is a quicker process for private companies to go public and means they can avoid scrutiny, such as opening up their books, that would come with a float.
More than a quarter of the deals in the US so far this year have been Spacs, notably online broker Etoro, and in the past companies such as Sir Richard Branson’s Virgin Galactic have used them to join the market.
Britishvolt’s former boss, Lars Carlstrom, quit in December after it emerged he was convicted of tax fraud in Sweden more than 20 years ago.