- Mercia owns a 16.4 per cent stake in Faradion
- Reliance to provide a further £25m to support commercial roll-out
Mercia Asset Management (MERC), the venture capital company focused on UK regions, said a battery company in which it is a significant stakeholder is being sold to India’s Reliance Industries (IND: RELIANCE) in a deal that values it at £100m.
Mercia holds a 16.4 per cent stake in Faradion, a Sheffield-based business that has developed sodium-ion battery technology that claims to provide a cheaper and cleaner alternative to lithium-ion batteries used to store energy. The company is also working on developing batteries for electric vehicles.
Mercia, which has £948m of assets under management, should receive an initial £18.6m in cash once the deal concludes, plus a further £800,000 payable over three months.
Faradion was founded in 2011 by Dr Jerry Baker, Dr Chris Wright and Ashwin Kumaraswamy. Other investors in the business include Danish chemicals company Haldor Topsoe, Finance Yorkshire, Sharp and the RisingStars Growth Fund.
Reliance Industries said it will provide a further £25m on top of its purchase price to support a commercial roll-out of Faradion's batteries, which it intends to use at its green energy "giga complex" project at Jamnagar, India.
Reliance Industries is India's biggest privately-owned company with investments in a range of sectors from oil & gas to retail, telecoms, media and technology. It made a net profit of 537.4bn Indian rupees (£5.4bn) on revenue of 5.4 trillion rupees in the year to March 31.
Mercia Asset Management's shares jumped 5 per cent, taking its year-to-date gains above 50 per cent. However, the company now trades at 53-times forecast earnings, so this might be a good time for investors to look at taking profits rather than adding to their stake. Hold.
