UK battery start-up Britishvolt is preparing to potentially fall into administration, risking almost 300 jobs.
The company has been developing a £3.8 billion gigafactory in Blyth, Northumberland, which it had hoped would employ up to 3,000 workers.
However, the group has been in emergency fundraising talks in recent weeks.
The UK government backed the plans for the gigafactory in January and said it would support Britishvolt with undisclosed funding, understood to be about £100 million. However, the firm has not yet received this funding.
The Financial Times has reported that the company could slide into insolvency soon.
It is understood that Britishvolt has lined up advisers from EY to oversee the potential administration process.
The company had received tens of millions of pounds of financial backing from FTSE 100 metals firm Glencore, which saw its shares dip on Monday morning.
The company has faced uncertainty in recent months, with co-founder Orral Nadjari leaving the firm in July.
Over recent months, the company has held urgent talks to access more funding to pump into its development until it can start production and deliver its own revenue.
“We are aware of market speculation,” a spokesman for Britishvolt said.
“We are actively working on several potential scenarios that offer the required stability.
“We have no further comment at this time.”
Shadow business secretary Jonathan Reynolds said: “This disastrous news is a further reminder that the economic crisis made in Downing Street is costing jobs and investment.
“It is a sight that has become all too familiar — businesses going under, jobs being lost and investment in the industries of the future going abroad rather than the UK.
“The blame here lies with a Conservative government that has run Britain’s economy down over 12 years, failed to back growing industries as other countries have and has completely failed to grow our economy.”
The firm had teamed up with Prologis in May to also create a £200m car battery plant in the West Midlands.
The facility is due to complement its Gigaplant at Blyth and enable it to produce more batteries.
The Blyth Gigaplant, which is due to be operational by the end of 2023, will eventually produce cells for more than 300,000 electric vehicles a year, Britishvolt said.
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Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Global state-owned investor ranking by size
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1.
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United States
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2.
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China
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3.
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UAE
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4.
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Japan
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5
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Norway
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6.
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Canada
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7.
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Singapore
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8.
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Australia
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9.
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Saudi Arabia
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10.
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South Korea
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Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
