The funds will be allocated in two tranches of £0.5m each, with the first tranche set to be drawn within two business days.

This loan facility, repayable at 110% of the total amount drawn, gives AMTE Power the necessary time and financial resources to finalise a deal with an unnamed investor who conditionally proposed a £2.5m initial equity investment in exchange for 80% of the company’s issued share capital. The funds from the proposed equity investment would ensure the company’s financial stability through September 2023.

Moreover, Arena agreed to waive its conversion rights from a pre-existing £4m convertible bond facility announced in October 2022. As part of this agreement, Arena will receive warrants for 2% of the company’s share capital, exercisable 12 months after the subscription under the initial recapitalisation plan.

Alan Hollis, CEO at AMTE Power, said: “I am very pleased to announce the bridging loan to be provided by Arena, which buys AMTE Power 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.”

Details about the initial recapitalisation plan remain uncertain at this point, are subject to due diligence, approval by the Takeover Panel, Investment Security Unit of the Department for Business, Energy and Industrial Strategy, and the company’s shareholders.

AMTE currently operates a Thurso battery manufacturing plant and disclosed plans last year to construct a gigafactory at the former Michelin tyre plant in Dundee.