The collapse of a next generation battery technology firm, which promised to create hundreds of jobs at a factory in Port Talbot, has resulted in the biggest equity investment loss for the Development Bank of Wales.
Oxis Energy was developing lithium sulfur rechargeable batteries for use in a wide range of applications including buses and trucks.
Read more: Oxis' expansion plans
However, after funding issues the business was put into administration by its directors. Its assets and intellectual property have since been acquired by chemical and sustainable technologies multinational Johnson Matthey after restructuring firm BDO was appointed to overseen the administration in May.
The development bank, as a minority investor, has confirmed it is not anticipating any return on the £3.25m equity investment it made into Oxis three years ago from the administration process.
According to the statement of affairs lodged with Companies House by BDO, Johnson Matthey offered £6.2m for all of Oxis’ tangible assets and most intellectual property assets - which included £400,000 to discharge financial obligations.
A spokesperson for the Development Bank of Wales, which is wholly-owned by the Welsh Government, said: “In 2019, the Development Bank of Wales made an equity investment of £3.25m into Oxis Energy alongside a further £20m from blue chip investors to establish a facility in Port Talbot manufacturing high performance batteries based on unique lithium sulphur technology.
“The company was significantly impacted by the pandemic and despite all efforts, entered administration in May having failed to secure further funding or a buyer. The proceeds from the company administration will be distributed to the company’s creditors according to priority. As a minority shareholder the development bank does not expect to realise any return from this process.”
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The equity loss is the biggest suffered by the development bank and its predecessor Finance Wales.
At the time of Oxis being put into administration it employed 76 across its 海角视频 sites. Between 2005 to 2020 it has raised more than £55m in various equity investment rounds to fund the development of its lithium sulfur technology.
It was seeking further investment of more than £20m and was in talks with a Singapore-based investor. However, the intended first tranche failed to materialise at the beginning of the year. The development bank had considered supporting that planned fundraising round, providing a lead investor could have been secured.
To support Oxis, while it was seeking fresh long-term investment, the development bank provide a £50,000 secured loan, alongside other investors who in total provided £250,000, in February. With a charge over Oxis’ assets the development bank is expected to get its £50,000 back in full.
A condition of its minority equity investment was that the company, set up by Welshman Huw Hampson-Jones, established its manufacturing plant in Wales.
It subsequently entered into a 15-year lease for 100,000 sq ft of industrial space at the South Wales Distribution Centre , part of wider Kenfig Industrial Estate, for the world’s first ever manufacturing plant for the production of electrolyte and cathode active material specifically for the mass production of lithium sulfur cells. While a long-term goal it aimed to created hundreds of jobs.
As well as its Port Talbot manufacturing base it also had its head office and R&D facilities at the Culham Science Park in Abingdon, Oxfordshire as well as a nearby international testing centre.
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Johnson Matthey has only take on the lease at Culham Science Park.
Shadow Economy Minister Paul Davies MS, said: “Investing in new and innovative technologies in parts of Wales that require rejuvenation is exactly what the Development Bank is meant to do. However, as a guardian of taxpayers money, there is a duty on the Bank to ensure that funds are spent wisely and productively.
“On the, hopefully rare, occasions where investments fail, it’s vital the bank makes efforts to recoup as much of its cash as possible. Therefore, it is disappointing that the bank admits it does not expect to realise any return from the process.
“I believe it is only right that Labour’s Economy Minister delivers a statement as soon as possible explaining how the firm’s collapse came about, why no money can be recovered, and what lessons have been learnt for future investments.”
Restructuring partner with BDO, Simon Girling, said: “We are pleased to have secured the sale of 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 in challenging conditions. This will enable a significant distribution to be made 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 (CCM) and advanced materials for electrolysers.
Its chief executive Robert MacLeod said: “We are delighted to secure this acquisition. The capability this opportunity delivers will enable our green hydrogen business to accelerate the scale-up of CCM production in line with market demand. The purchase of these assets further demonstrates our commitment to developing a low carbon economy and progressing towards net zero.”