Friday, May 24, 2024

Britishvolt ‘gigafactory’ site to be sold for £110m to US private equity firm

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The site in north-east England previously owned by the failed battery startup Britishvolt is to be bought for £110m by a US private equity firm, which plans to build one of Europe’s largest data centres.

Blackstone Group is to buy the 95-hectare (235-acre) site near Cambois in Northumberland to take advantage of its links to renewable energy, according to the receivers for one of the Britishvolt companies.

The receivers did not disclose the amount paid for the site, but Northumberland county council documents show the local authority will create a £110m “growth and investment endowment fund” as a result of the deal.

Britishvolt burst on to the scene in 2019, promising to build batteries to power Britain’s electric cars. The company garnered the support of the then prime minister, Boris Johnson, and a promise of £100m in government subsidy, before collapsing in early 2023.

The site formerly housed Blyth power station, a pair of coal-fired units. The receiversBob Maxwell and Julian Pitts of Begbies Traynor Group said Blackstone planned to turn the site into “one of the largest data centre facilities in western Europe”.

Analysts expect demand for data centres to continue to grow rapidly as households and businesses stream and send ever more digital content and information, and demand for cloud internet services and artificial intelligence also increase.

The deal will secure the future of a large brownfield site in a relatively deprived part of the UK. It will also be able to make use of local green-power generation including from offshore wind. However, it is also likely to end the dream of securing thousands of jobs at the site, which had been the hope of the council. It had retained an option to buy back the site for £4m, the price Britishvolt paid, if the owners failed to build a gigafactory.

The startup had promised to bring as many as 3,000 jobs to the region with an ambitious plan to build a second car battery “gigafactory” in the north-east of England that rivalled the Chinese-owned AESC plant in Sunderland. Britishvolt managed to win tens of millions of pounds of investment from the FTSE 100 companies Ashtead and Glencore, as well as Tritax, a property investment arm of the asset manager abrdn.

However, the project floundered as Britishvolt spent heavily on developing its own battery technology, and failed to secure the orders it needed to unlock further funding. Construction at the site started, but the Guardian revealed that it was put on “life support” in the summer of 2022.

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Maxwell of Begbies Traynor said of the Blackstone deal: “From a difficult situation, the future sale will ensure a very bright future for the site. This transaction ensures that a well-funded and respected new owner can bring the enterprise and employment to the site that it deserves, and will be a huge boost for the whole region.

“Its scale and location make it perfect as the location for a European data hub, and the plans put forward will hopefully kickstart an entire tech industry cluster in the north-east from the site.”

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