The collapse of a next-generation battery technology company, which promised to create hundreds of jobs at a factory in Port Talbot, resulted in the biggest loss of capital investment for the Country Development Bank. Wales.
Oxis Energy was developing rechargeable lithium-sulfur batteries for use in a wide range of applications, including buses and trucks.
Read more: Oxis expansion plans
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.
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 100% Welsh Government-owned Development Bank of Wales 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 company 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 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.
He subsequently entered into a 15-year lease for 100,000 square feet of industrial space at the South Wales distribution center, which is part of the larger Kenfig industrial area, for the first manufacturing plant in the United States. world for the production of electrolytes and cathodic active materials specifically for the 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 head office and R&D facilities at Culham Science Park in Abingdon, Oxfordshire, as well as an international testing center nearby.
Johnson Matthey took only the Culham Science Park lease.
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 for 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. “