Scotland’s hopes of landing a huge battery manufacturing plant have suffered a further setback after the struggling company behind the plan saw trading in its shares suspended.

Cash-strapped AMTE Power, which has a plant in Thurso and hopes to build a megafactory in Dundee producing eight million cells a year, warned in July that it faced collapse unless it could persuade investors to back a recapitalisation plan.

It bought some time last week after raising £2.1 million before expenses in a placing of shares priced at 1.7 pence per share. It said talks with a potential equity investor are expected to complete in the coming weeks.

However, on Wednesday morning the London Stock Exchange announced that it has been monitoring the settlement situation in AMTE Power following the issue of the new shares which are conditional on shareholder consent. 

“As a result of the deterioration in settlement performance, the trading of AMTE Power plc shares has been temporarily suspended under Rule 1510 of the Rules of the London Stock Exchange,” said the LSE in a statement. 

“Settlement of outstanding transactions can continue whilst the security is suspended.  The Exchange will continue to monitor the settlement situation and when trading is to be restored, the market will be notified by Stock Exchange Notice.”

The shares were suspended at 2.24p. They floated in 2021 at 175p valuing the company at £61 million.

It is proposing to raise up to a further £0.25m (before expenses) through a retail offer to existing shareholders.

The placing will be used to provide further time for the company and a potential new equity investor to inject an initial equity investment of £2.5m.

AMTE said the Investor’s due diligence is progressing is expected to complete by the end of October. 

It is the second Scottish company this week to see trading in its shares suspended. On Monday, Scotgold Resources, which is mining for gold near Loch Lomond, suffered a similar fate and potential administration over an unpaid debt.