Delays in product development, high commodity prices and investors pulling out were behind some of the most recent bankruptcy events in the ESS battery technology space, which include Nilar, AMTE and Ambri.
The pace of technological change and proliferation of companies driving that change in the battery and energy storage system (ESS) space inevitably mean companies will rise and fall all the time. In this article, we look at some of the most recent failures, how their stories concluded and why they happened in the first place.
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Ambri: investors pulling out in ‘challenging fundraising environment’
US-based liquid metal battery firm Ambri’s Chapter 11 bankruptcy and recent sale of assets to a consortium of its lenders was covered by Energy-Storage.news last week. The firm’s technology is based around liquid calcium anodes and molten salt electrolyte.
Filing for Chapter 11 bankruptcy protection is different to a Chapter 7 one, which immediately kickstarts the process of asset sales, and Ambri has now come out of the process with a new CEO.
A statement by company CFO Nora Murphy in a filing from June 2024 with the bankruptcy court of Delaware court explained how the company ended up financial difficulties.
The company had been doing well in demonstrating its product development until 2022, raising nearly US$150 million in equity. In June that year, it entered into a lease for a Milford, Massachusetts space to set up a high-volume production facility for its battery technology. However, it required a ‘significant and costly buildout’, Murphy said, with US$18 million invested between June 2022 and 5 June 2024, when it filed a petition for Chapter 11 bankruptcy.
Ambri launched a Series F financing round in Spring 2023, which it would use to build out the Milford facility as well as fund R&D and working capital.
However: “Like many pre-revenue companies in the renewable energy space, that initial
growth was interrupted by an incredibly challenging fundraising environment,” Murphy said, referring to the increase in interest rates globally.
“Although Ambri had initially secured an anchor investor for the round, this anchor investor declined to participate towards the end of the process. In turn, Ambri sought a replacement anchor investor, but due to softness in the market, Ambri was unable to secure a replacement anchor investor
for the Proposed Series F Financing and could not complete the Series F financing round that
would have enabled it to meet its cell development milestones and manufacturing initiatives.”
The company then went to existing investors for a U$50 million of bridge financing, which was initially agreed only for one to then also pull out, leaving an US$8 million shortfall. Though the company attempted to reduce its burn rate, including by laying off 105 employees in November 2023, it could not secure enough concessions from its creditors to relieve liquidity constraints.
Ambri, an MIT spin-out, said the recent sale of assets would be the best avenue to recapitalise the company and secure its future. The company may have a more unique value proposition than other budding ESS battery technology firms, with its focus on the data centre market.
Read the Delaware filing in full here.
Nilar: slowdown in Swedish market and high commodity prices
In November 2023, Sweden-based nickel metal hydride battery company Nilar International AB filed for bankruptcy with a district court after it failed to find a solution to ‘strained and urgent liquidity needs in both the short and long term’.
Losses for Nilar International AB ran to 600 million SEK (US$57 million) in 2021 and 287 million SEK in 2022 according to Swedish company registry site Allo Bolag.
Last month, zinc-ion battery technology company Enerpoly acquired Nilar’s end-to-end battery production line and process development capabilities, as part of its efforts to set up a zinc-ion manufacturing facility this year. That facility will eventually have an annual capacity of 100MWh.
Nilar had been trying to develop and manufacture batteries for the stationary energy storage system (ESS) market, and said its technology had higher safety and recyclability than other chemistries. Its facility and head offices were both located in Gävle.
In 2020, it received a €50 million (US$55 million) loan from the European Investment Bank (EIB) to commercialise and scale up and then IPOed on the Sweden Nasdaq a year later.
In an earnings call a month prior to the bankruptcy application, discussing the ESS market which it was targeting, Nilar CEO Erik Oldmark alluded to potential problems the company was facing.
“Even though are expecting tremendous growth in the market, for the time being we are seeing a bit of a slowdown in the Swedish market, driven by a few things. Firstly, we have lower electricity prices compared to the last two years, due to a very wet summer,” Oldmark said.
The latter point presumably refers to the impact that has on Sweden’s hydropower production, one of its main sources of electricity.
“Combined with the decrease in the Swedish currency and higher interest rates, that has put a pause on deployments in the Swedish market. But, it’s not something we see in the European market which has a completely different logic in its energy market which puts demand on ESS in a favourable place.”
Enerpoly meanwhile said, when announcing the acquisition, that Nilar’s battery chemistry used expensive raw materials and thus suffered from high commodity prices.
AMTE: delays in onboarding new investor
Also in November 2023, Scotland-based sodium-ion battery tech firm AMTE Power Plc said that it no longer had sufficient funds to continue operating and had appointed administrators FRP Advisory to seek potential buyers of the business and assets of the company. A year prior it had said its sodium-ion cells were ‘nearly ready’ to send to customers.
The decision was taken after private equity backer Pinnacle declined to advance funds under a convertible loan facility. AMTE had been developing products for electric vehicles (EV), ESS and ‘other speciality markets’.
In February 2024, three months later, FRP announced that it had secured the sale of part of the trading business and assets of AMTE to LionVolt, a Dutch battery technology startup.
AMTE made a £3.8 million (US$5 million) pre-tax loss in the year to 30 June 2021, at which point it identified a ‘significant funding gap’ and two of its five products development was ‘significantly delayed arising from difficulties in scaling up’, the administrators said according to Insolvency Insider UK. That scuppered plans for a Dundee gigafactory, and the loss grew to £6 million in the year to June 2022.
FRP was initially appointed to handle an accelerated mergers and acquisitions (AMA) process – used for distressed assets – in mid-2023 but no viable offers were received, shortly before Saudi-based Pinnacle came in with one. However, due diligence delays meant the money did not come in time. A second AMA led to the £3.05 million offer from LionVolt which was accepted.
The administrators’ report didn’t go into detail on why AMTE ultimately did not survive, but gave a few clues. It said that, although the company was the first sodium-ion manufacturer in Europe to certify a cell, it suffered delays in developing its products due to financial pressures. The uncertainty led to a fall in headcount from 70 in July 2023 to 35 at the time of the administration, all but one of which were voluntary departures, FRP said.
The company board also said that the 2022 Autumn statement by chancellor Jeremy Hunt—the UK’s chief finance minister—negatively contributed to AMTE’s future because of its negative impact on the markets. 2023 also saw a second attempt to certify a new cell product fail.
Proterra and Azelio
Other companies in the energy storage space to have entered bankruptcy proceedings in the past year include US battery pack manufacturer Proterra, which was sold to Volvo, and thermal energy storage technology firm Azelio, based in Sweden.