U.K. Electric-Car Battery Startup Now Considering London Listing

(Bloomberg) -- Britishvolt Ltd., which is about to start building the U.K.’s first giant battery factory, is considering listing on the London Stock Exchange to help finance the 2.6 billion-pound ($3.6 billion) project that could be key to helping the nation reduce carbon emissions from transportation.

A decision on whether to list in London or New York will be made within three months, Orral Nadjari, founder and chief executive officer of Britishvolt, said in an interview. The company was due to decide by the end of June whether to list in the U.S. through a merger with a special purpose acquisition company, or SPAC, but it’s chosen to push back that deadline.

London now appeals more to Britishvolt after stock-market listing rules were overhauled in an effort to bolster the city’s status as a financial hub in the aftermath of Brexit. In a report this year, Jonathan Hill, a former British financial services commissioner for the European Union, advised introducing dual-class share ownership to let company founders keep greater voting power and reducing the amount of equity a company must sell to outsiders.

​“Britishvolt belongs on the London Stock Exchange,” Nadjari said. “At the back end of the Hill report, we are now seeing more opportunities arising within the U.K.”

The U.K. is banning sales of new gasoline- and diesel-powered cars by 2030, and it needs a factory to produce batteries for electric vehicles. Sales of EVs -- both battery-electric and plug-in hybrid models -- more than doubled in Europe last year to about 1.3 million units, topping China for the first time.

Prime Minister Boris Johnson’s government is trying to avoid falling behind in a transcontinental competition to chip away at the dominance of Asian battery makers and Tesla Inc. Johnson has committed 1 billion pounds to help build factories that can produce batteries at scale.

“There is an opportunity for Britishvolt to become a new champion as part of this industrial revolution that is currently happening,” Nadjari said.

Blyth-based Britishvolt will start construction work in northeast England at the end of this month, Nadjari said. The site will use hydropower from Norway, as well as wind power from the North Sea, and could be online by 2023.

The company has signed memorandums of understanding and joint development agreements with several car companies, but Nadjari declined to give further details.

Barclays Plc is advising Britishvolt, and the battery maker wants a direct or technical listing similar to that used by digital-payments provider Wise Plc last week. Barclays was lead financial adviser in that deal, which was London’s biggest technology float.

A reduction in the level of shares required to go public is one of the recent changes by the LSE that most appeals to Nadjari. He is the largest shareholder, followed by William Harrison, CEO of private equity firm Cathexis Holdings LP.

If all goes according to plan, Britishvolt could be listed by the end of the second quarter next year, and Nadjari said he expects to announce some direct purchase orders with car companies by the end of June. After that, he plans to start issuing green bonds.

“We still are actively analyzing the stock market and doing due diligence on various opportunities,” Nadjari said.

He already has some domestic competition after Nissan Motor Co. announced earlier this month it will create a $1.4 billion hub in northern England to manufacture EVs. The Japanese automaker is partnering with a battery making subsidiary of China’s Envision Group to build a factory, which won’t be ready until at least 2024.

The U.K. government’s funding body -- the Automotive Transformation Fund -- may support two giant battery factories. The Nissan project was allocated some funding, but the companies and the government both declined to say how much. Britishvolt has applied for funding and is awaiting a response.

Nadjari would like to balance 1 billion pounds of equity and 1 billion pounds of green bonds, which will cover the first phase of the U.K. project and allow the company to turn its attention toward building another giant battery factory in Canada.

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