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A British car battery company led by former Tesla executives has pulled out of the London Stock Exchange less than a month after bilking investors for £500,000.
DG Innovate (DGI), which is led by former Tesla chief Peter Bardenfleth-Hanse, criticized the lack of support for start-ups in the city as having prompted the decision to leave the main market and go private.
In particular, the company said red tape around London’s share listing rules meant it was harder to raise money, which has hampered its attempts to grow.
However, the company had raised £500,000 from investors in early December, saying the cash would keep it afloat until February 2025 and support a new joint venture with Indian firm Evage.
It also raised £100,000 in September.
After the delisting is completed in early 2025, the company said it would propose a mechanism for existing investors, who will retain their stakes, to trade their shares privately.
Bardenfleth-Hansen was appointed to lead DG Innovate in December 2023, along with former Tesla executives Christian Eidem and Jochen Rudat.
Mr. Bardenfleth-Hansen and Mr. Rudat previously held senior positions in Tesla’s European teams.
DGI’s shareholders include Mr Eidem, a former adviser and classmate of Elon Musk, who owns 24% of the business, and Norway’s biggest bank, DNB.
After Tuesday’s announcement, the company said: “There has been and continues to be a broad lack of demand for exposure to companies at the current stage of DGI’s development within base of traditional UK institutional investors“.
The bosses added that they did not “anticipate any obvious short-term catalysts that could change this context”.
DGI shares collapsed by 75% after the announcement, reducing the company’s value to £2.8m from £12m.
Although DGI is a small company, the delisting is a blow to the London Stock Exchange’s reputation as a place where small businesses can access cash to grow.
Historically, companies have used the exchange as a means to expand. But three years of outflows from UK equity funds have left smaller listed companies without support.
A dearth of new listings has also weakened the London market due to the Increase in companies taken private by foreign investors.
The London Stock Exchange changed its listing rules earlier this year to reduce some of the burdens of a float, including making it easier to make decisions without the need for a shareholder vote.
Ironically, DGI took advantage of the latest rule change to push through the delisting plan without shareholder approval.
Based in Wales, DG Innovate is developing batteries made from sodium as an alternative to the lithium batteries more widely used in electric vehicles (EVs).
