AMTE Power secures fresh £1m loan from investors as it scrambles to avoid administration
AMTE Power has announced a fresh loan facility from a US asset manager, an eleventh hour lifeline for the beleaguered battery firm as it scrambles to secure a new equity partnership amid escalating fears over the company’s future.
The UK’s only home grown battery cell maker, that provides lithium and sodium ion products for high-end electric vehicles and sports cars, has been given a £1m reprieve from Arena Investors.
Chief executive Alan Hollis hopes the injection will tide over the business, as the Highlands-based group looks to close a £2.5m funding deal with an undisclosed equity investor.
Hollis said: “I am very pleased to announce the bridging loan to be provided by Arena, which buys AMTE the time and financial resources to allow the equity investor to complete its due diligence and internal procedures ahead of some much needed further investment in the business.”
The FTSE AIM All-Share company will receive its fresh emergency support from Arena in two tranches of £500,000 each, which will flow into the company within the next two days.
The loans are secured over the assets of the company and are repayable at a 10 per cent premium with a two year payback window.
This is the second time Arena has come to the rescue with AMTE securing a £1m facility from the company in April, alongside £580,000 from state-backed vehicle Highlands and Enterprise.
Meanwhile, the unnamed equity investor has offered £2.5m in exchange for 80 per cent of the share capital in the company, providing sufficient financial resources to the end of September 2023 and giving it two months to bolster its long-term financial stability.
To sustain operations, AMTE Power drew down a £580,000 loan facility from Highlands and Enterprise in March and £1m from its convertible loan facility with Arena Investors in April.
AMTE also revealed the potential new investor has outlined plans to provide future funding requirements, although these details have not been agreed between both parties.
This follows the company announcing a four week deadline for new funds last month, warning that administration was increasingly likely.
AMTE’s shares have shown flickering signs of recovery following yesterday’s announcement, rising to 12.5p per share – a 213 per cent spike in late trading last night.
However, they remain well below its pre-crisis price of 51p per share, or its peak valuation of 314p per share shortly after its launch on the London Stock Exchange two years ago.
Prior to its fall from grace, the company had drawn up plans to build a £160m factory in Dundee, but has seen its valuation slump amid financing challenges.
Its decline is a blow to the UK’s ambitions to revive its car industry with the mass production of electric vehicles, batteries and technologies.
AMTE has reportedly struggled to hold talks with the government over potential funds, even as Downing Street confirmed a mega factory with Jaguar Land Rover this month.