"This is one of the worst days of my life, a sad day for our employees, customers, and quite a few of our suppliers. We are forced to petition the court to appoint a temporary receiver, after all efforts to raise more money for the company failed," said Better Place CEO Dan Cohen in a conference call, after Israel Corporation (TASE: ILCO) announced that it would not invest more money in the electric car venture.
"We have concluded that, under the circumstances, management has no choice but to show the figures to the board of directors, which will have to take the right decision. There are still some cash reserves to maximize possible compensation to all the company's creditors, employees, and customers. There is a great feeling of a missed opportunity, and the sense of loss is felt at every level of management. We are doing everything to maintain the network and the company to the best of our ability until the temporary liquidator arrives.
"Globes": What will happen to Better Place's customers?
Cohen: "We're doing everything to serve the customers and operate the recharging network, until the liquidator makes a different decision. The customers and employees are the top of our concerns."
Might the liquidator decide to take the battery and leave a useless car?
"Ownership of the car is different for each customer, and it's true that the customer doesn’t own the battery. This is the first thing that the liquidator will have to examine, and it's hard to give an answer now."
Car industry sources believe that a solution will be found for private customers, possibly in collaboration with Renault SA (Euronext: RNO), which makes Better Place's Fluence ZE electric cars. Creditors which will be hit by the company's liquidation include Baran Group (TASE: BRAN; Nasdaq: BRANF), which built the battery replacement stations in Israel and is owed tens of millions of shekels; car leasing companies Eldan Ltd. and Albar Ltd., which could lose millions of shekels to replace customers' electric cars; Israel Electric Corporation (IEC) (TASE: ELEC.B22), and Israeli and foreign equipment vendors.
In a notice to the TASE, Baran said that it would write off the balance of Better Place's NIS 54 million debt to the company, after it wrote off NIS 16.5 million in its financial report for 2012.
Why did the project fail?
"Both the vision and the model were right, but, over the years, the company made several mistakes, which delayed things. On the other hand, we did not obtain support from the car companies or from the countries we operated in."
Israel Corp. controlling shareholder Idan Ofer once said that Qoros Auto Company would have a battery replacement mechanism. Have any lessons been learned?
"Qoros is focused on the market launch of the car it unveiled at the Geneva Motor Show, but I cannot speak on its behalf."
How much investment has gone down the drain?
"$850 million."
How many employees does Better Place and when will they go go?
"We have 350 employees in Israel, and I cannot discuss what their immediate fate will be."
Published by Globes [online], Israel business news - www.globes-online.com - on May 26, 2013
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