Better Place files for liquidation
Israel Corporation decides to pull plug on electric car venture after failing to raise capital required for business' operation. Following decision, Better Place set for closure, hundreds of employees will be laid off. 'This is a difficult day for all of us,' says CEO
Since its establishment in 2007, the company has accumulated more than NIS 3 billion (about $810 million) in losses.
According to a statement released by Better Place, a liquidation application was filed with the Central District Court along with a request to appoint a provisional liquidator.
A company source says the appeal to the court is aimed at "guaranteeing that the company's employees, customers and creditors are able to exercise their rights in the optimal way in light of the remaining resources."
Following the decision, Better Place is set for closure and hundreds of employees will be laid off. The company has already fired hundreds of employees in recent months.
Better Place founder and first CEO, Shai Agassi (Photo: AP)
The fate of electric car owners who have a contract with Better Place for battery switch services is still unclear. Sources associated with the company's management explained that the provisional liquidator appointed by the country will be required to make a decision on the matter.
In addition, a solution will be have to be found for leasing companies which have rented out hundreds of electric cars to their customers, as some of them have been promised that the cars would be purchased at the end of the leasing period.
'We could not find the right investors'
In a statement to the Tel Aviv Stock Exchange, Israel Corp. clarified that "the board of directors has decided not to participate in the investment round Better Place offered investors. Since we could not find the right investors to partake in a significant proportion of an additional investment round, Better Place will submit an application to the court regarding its liquidation."
Better Place executives, together with the Israel Corp. management, have been trying in recent weeks to raise the capital required for the business' operation. But these efforts failed, and now the company will begin bankruptcy procedures."
Israel Corp. said in an official statement, "This is a very sad day, in which our efforts to fulfill a universal vision have failed. The vision was led by Shai Agassi in a long way filled with challenges, together with investors and partners who turned his vision into reality. Unfortunately, the road to the fulfillment of the vision was tough and complicated, facing many obstacles."
Better Place CEO Dan Cohen said Sunday morning, "This is a difficult day for all of us. The State of Israel is the first country in which an electric car can travel without any restrictions.
"Despite high customer satisfaction, the product was not received adequately by the wide public and failed to receive sufficient support from car manufacturers. The company has no other choice right now but to initiate an appeal to the court to appoint a provisional liquidator."