The collapse of a next-generation battery technology company that promised to create hundreds of jobs at a factory in Port Talbot, resulted in a loss of more than £ 3million for the Development Bank of the country of Wales, owned by the Welsh government.
Oxis Energy was developing rechargeable lithium-sulfur batteries for use in a wide range of applications, including buses and trucks.
However, after funding problems, the company was put under administration by its directors. Its assets and intellectual property have since been acquired by chemical and sustainable technology multinational Johnson Matthey after restructuring firm BDO was appointed to oversee administration in May, Business Live reports.
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The development bank, as a minority investor, has confirmed that it does not anticipate any return on the £ 3.25million equity investment it made in Oxis three years ago from of the administrative process.
According to the statement filed with Companies House by BDO, Johnson Matthey has offered £ 6.2million for all of Oxis’ tangible assets and most of the intellectual property assets, including £ 400,000 to meet its obligations. financial obligations.
A spokesperson for the Development Bank of Wales, which is 100% owned by the Welsh government, said: ‘In 2019, the Development Bank of Wales invested £ 3.25million in Oxis Energy alongside £ 20million. extra pounds from blue chip investors. to establish a factory in Port Talbot manufacturing high performance batteries based on unique lithium sulfur technology.
“The business has been significantly affected by the pandemic and, despite all efforts, entered administration in May without being successful in securing additional funding or a buyer. The proceeds of the administration of the company will be distributed to the creditors of the company according to priority. As a minority shareholder, the development bank does not expect any return from this process. “
The loss of equity is the largest suffered by the development bank and its predecessor, Finance Wales.
At the time of administration of Oxis, it employed 76 people at its UK sites. Between 2005 and 2020, it raised more than £ 55million in various fundraising rounds to fund the development of its lithium-sulfur technology.
He was looking for an additional investment of over £ 20million and was in talks with a Singapore-based investor. However, the first planned tranche did not materialize at the start of the year. The development bank had considered supporting this planned fundraising, provided that a lead investor could be found.
To support Oxis, as it sought new long-term investments, the development bank provided a guaranteed loan of £ 50,000, alongside other investors who provided a total of £ 250,000, in February. With a charge on Oxis’ assets, the development bank is expected to recover all of its £ 50,000.
A condition of its investment in minority shares was that the company, set up by Welshman Huw Hampson-Jones, establish its manufacturing plant in Wales.
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He subsequently entered into a 15-year lease for 100,000 square feet of industrial space at the South Wales distribution center, part of the larger Kenfig industrial area, for the first manufacturing plant in the United States. world for the production of electrolyte and cathodic active material specifically for mass production of lithium-sulfur batteries. While this was a long term goal, it aimed to create hundreds of jobs.
In addition to its manufacturing base in Port Talbot, it also had its headquarters and R&D facilities at Culham Science Park in Abingdon, Oxfordshire, as well as an international testing center nearby.
Johnson Matthey took the lease only at Culham Science Park.
Shadow Economy Minister Paul Davies MS said: “Investing in new and innovative technologies in areas of Wales that need rejuvenation is exactly what the Development Bank is supposed to do. However, as the custodian of taxpayers’ money, the Bank has a duty to ensure that funds are spent wisely and productively.
“In the, hopefully rare, occasions when investments fail, it is essential that the bank strives to recover as much cash as possible. Therefore, it is disappointing that the bank admits that it does not expect any feedback from the process.
“I think it is only fair for the Labor Minister of the Economy to make a statement as soon as possible explaining how the collapse of the company happened, why no money can be recovered and what lessons have been learned. been drawn for future investment. “
Simon Girling, BDO Restructuring Partner, said: “We are delighted to have secured the sale of the assets and intellectual property of Oxis Energy. With the help of TLT Solicitors, Gordon Brothers, Marsh and PHD Property, we were able to preserve the asset base under difficult conditions. This will allow a significant distribution to creditors.
The acquisition is expected to significantly accelerate Johnson Matthey’s growing green hydrogen business, further expanding its ability to develop, test and manufacture catalyst coated membranes (CCMs) and advanced electrolyzer materials.
Its Managing Director, Robert MacLeod, said: “We are delighted to secure this acquisition. The capacity offered by this opportunity will allow our green hydrogen business to accelerate the increase in CCM production in line with market demand. The purchase of these assets demonstrates once again our commitment to developing a low carbon economy and moving towards net zero. “
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