January 20, 2023: Monbat revealed on January 17 that it had been forced to delay part of a bond loan repayment as a result of the collapse of UK gigafactory developer Britishvolt, because a cash and shares deal between the two had not been completed in time.
Monbat’s announcement came on the same day administrators were appointed for Power by Britishvolt Limited, which had insufficient equity investment to continue — as reported separately by BESB.
Bulgaria-based lead acid batteries giant Monbat had previously agreed to sell its lithium-based EAS Batteries company to Britishvolt in a cash and shares deal worth €36 million (about $38 million), which was announced in May 2022.
Monbat said in a Bulgarian market update on January 17 it had expected to use the proceeds of the Britishvolt deal to repay a bond loan linked to that agreement.
Instead, Monbat has been forced to “alternatively secure funds” for the first principal instalment on the bond loan in the sum of €5,603,000, due on January 20. This will now be paid not later than January 31, the battery maker said.
“Due to circumstances outside our control, the transaction with Britishvolt was not finalized within the planned timeframe,” the company said.
Under the terms of the bond loan, a substantial part of the proceeds from the issue were used to acquire shares in the capital of the entity Monbat Holding Germany, in the balance sheet of which the lithium-ion division of the Monbat Group was consolidated.
Monbat said the expected cash portion to be received from the transaction significantly exceeded the amount of the obligation for its first principal payment of the convertible bond issue.
“For this reason, the intention of the management was to use the cash from the Britishvolt transaction to service this payment.”
Monbat, a predominantly lead battery manufacturer, acquired EAS in 2017. Under the terms of the deal with Britishvolt, Monbat said it would continue to be part of the expected growth of the lithium ion industry through a minority stake it would hold in the UK developer.