Exclusive: Better Place liquidator says no guarantees for car owners

Source says Abramowitz failed to provide financial proof for vehicle releases.

By
August 26, 2013 20:05
3 minute read.
One of Better Place's battery switch stations in T

electric car 311. (photo credit: Better Place)

 
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Better Place car owners have no guarantee that battery swap stations, necessary to extend their cars’ range beyond 120 km., will remain open, the company’s liquidator Sigal Rozen-Rechev told The Jerusalem Post in an exclusive interview on Monday.

“There’s no hard obligation to keep them running, but they said they’d try to do it,” she said in reference to Tzahi Merkur’s Success Group, which became the purchaser of the Better Place’s assets on Sunday following failure of the first purchaser, the EV Group, to make payments.

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“For the moment, it’s up to them to decide.”

Though Better Place’s vision was to expand the number of swap stations around the country, Rozen- Rechev said, the small amount of vehicles made the cost of doing so very high, so it was unclear how long Merkur would keep them operational.

While she had hoped to sell Better Place as a “living business,” she said, there was no telling whether that would be the case. “I think most of the activity will remain, but for how long, or whether it will be in this form or another, I don’t know,” she said.

Merkur did not respond to the Post’s inquiries about his plans for Better Place’s assets or the battery swap stations.

A high-level source with knowledge of the bankruptcy proceedings, who asked not to be named, said that despite “unprecedented” efforts by both the state and the liquidators, the EV Group was unable to produce the necessary financial documents to get the state to release Better Place vehicles.



The EV Group’s Yosef Abramowitz maintained that the central reason his consortium was unable to make the necessary payments to the liquidator was the state’s lack of cooperation in releasing the vehicles, the sale of which would provide funds.

During his opening remarks in court on Sunday, Abramowitz said that the “liquidators misrepresented to us and our investors two key economic drivers.

“They claimed before we bid for the assets of Better Place that the company has a database of all the drivers, who will pay in NIS 1 million a month, and over 350 cars that we would be able to sell to help cover our costs,” Abramowitz continued.

“Both turned out to be false. To date, they have denied us the ability to sell [the] cars and there was no database for us to bill the drivers, so we and our investors were left out to hang. This is a miscarriage of justice and we shouldn’t be paying the price,” he said.

But the source said that the steps necessary to release the vehicles had been clear when Abramowitz put in his bid to buy the assets.

Despite efforts to expedite the process of freeing the vehicles, the source says, Abramowitz failed to produce financial guarantees for the cars. When the condition was relaxed to allow a letter of indemnity instead, he was still unable to provide one for the correct amount.

“If they had gotten a letter of indemnity, they would have gotten the vehicles. Yes, there’s a process and it takes time, but they’re looking for excuses,” the source said.

Abramowitz says that after he filed the letter, the liquidators insisted on a new version of the document with harsher, unreasonable terms.

"This was only the latest excuse," he told the Post in an e-mail. "The liquidators were in violation of the terms of the sale of Better Place, and the ministry has been an obstacle, which undermined investor confidence at a delicate moment," he says.

In the meantime, the purchase price of the assets dropped from NIS 18 million when it was first awarded to the EV Group down to NIS 11m. when the court awarded them to Merkur.

Sharon Udasin contributed to this report.

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