Court to discuss acquisition of Better Place assets if consortium cannot make payments

Green EV group, led by American-Israeli solar entrepreneur Yosef Abramowitz, on clock to fulfill financial obligations after challenge from rival would-be purchaser.

By
July 31, 2013 00:59
Better place car charging

Better place 311. (photo credit: Better place)

If the consortium holding the assets to fallen electric vehicle company Better Place fails to fulfill certain financial obligations by Wednesday morning, the Central District Court in Lod will hold a discussion to examine the group’s status as well as additional offers.

Judge Ilan S. Shiloh issued the decision after rival would-be purchasers of the fallen electric vehicle venture asked the court on Sunday to reevaluate the granting of the company’s assets to the Green EV consortium (known originally as SunRaise), claiming that the winning group cannot stand by its financial commitments.

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The Green EV group secured both the operational and intellectual property assets in court on July 10, for a total of NIS 18 million and NIS 25m. respectively.

Led by American-Israeli solar entrepreneur Yosef Abramowitz, members of the Green EV consortium include the nonprofit EV Drivers Association, which represents electric car owners, as well as Canadian investment banker Henry Shiner, who is active in cleantech and alternative energy markets.

Up against Green EV in the battle for Better Place was the Merkur-CCGI group, a collaboration between the Florida-based Car Charging Group, Inc. and the Israeli firm Success Parking Ltd., run by Tsahi Merkur.

After requesting an extension for two payments – NIS 1m. for intellectual property and NIS 3.5m. for company operations – Green EV received approval for such an extension until July 31 from the liquidators, Sigal Rosen- Rechav and Shaul Kotler. In the event that the company would require additional time to pay these figures, the issue would need to be brought to a discussion in court, a statement from Green EV explained.

Viewing the consortium’s financial tardiness as unreasonable, however, the Merkur-CCGI group sent an official response to the Lod District Court on Sunday, claiming that the time lapse “indicates that the group does not have the financial capacity required to fulfill the obligations assumed by the company in front of the liquidators and the court, on the basis of which the liquidators, the receiving officers and the court selected the proposal of the Green EV group over the Merkur-CCGI group.”

On July 1, Green EV and Merkur-CCGI jointly submitted a collaborative proposal to purchase the Better Place assets, the response explained. Soon after, however, the group split up and each submitted its own proposal, due to “the fear of the Merkur-CCGI group that the Green EV group did not have the economic resources,” the response said.

If the Merkur-CCGI knew that the liquidators would not hold so firmly to their original instructions, this group could have offered a larger proposal that would have manifested quicker, the document continued.

“The Merkur-CCGI group is of the opinion that the current situation of affairs is not sound, and we cannot enable it,” the response said. “There is a serious breach of equality, and this constitutes changes in the rules of the game.”

The Merkur-CCGI group asked that the court deny any postponement of Green EV financial commitments, as well as cancel the company’s winning bid on the Better Place assets.

In addition, the group proposed that the liquidators conduct negotiations with Merkur-CCGI immediately, stressing that Green EV should immediately stop implementing further changes to the assets – such as closing certain battery switch stations and firing employees.

In response to the Merkur- CCGI group’s court requests, Abramowitz explained that it is the government itself that is holding up Green EV’s payments for the assets.

Although Green EV won the ownership of 350 new Better Place cars as part of their purchase, sales of these vehicles is currently being held up by bureaucratic red tape in the Transportation Ministry, Abramowitz said.

Already with a waiting list of over 500 people registered to purchase cars, Green EV had planned to sell the first 200 for NIS 70,000 each, as opposed to the NIS 120,000 original price.

The NIS 14m. generated from these sales would have allowed for all milestone and company operations payments, including the NIS 3.5m. due on Wednesday, Abramowitz explained, noting that Green EV paid the outstanding NIS 1m. intellectual property fee on Tuesday.

“We don’t think it is right for the court to ask for payment for winning the bid but then have the state deny us the win of the assets, which were going to be used to complete the acquisition and run the company,” Abramowitz told The Jerusalem Post.

The NIS 14m. would have been enough to tide the company over until three large investment groups finish their deals with Green EV, as due diligence contracts take about 30 to 60 days to complete, he explained.

Green EV has already received financial offerings worth more than $30m., according to the company.

The holdup at the Transportation Ministry is purely a bureaucratic battle, as the ministry had repealed the import license on the cars after the Better Place bankruptcy occurred, even though the cars are already in the country, a Green EV representative explained.

The consortium therefore asked for a one-week extension last week when their payments were due, and the liquidator agreed to stretch the deadline to the end of the month, he said.

Confident that the court on Wednesday will agree to give Green EV more time, the representative stressed that the company will have no problem paying salaries and serving clients in the immediate two months, until the additional investments are sealed.

Green EV is simply asking for “day-for-day deferment” of the July 31 and August 30 NIS 3.5m. payments, to compensate the company “for each day of delay in releasing the cars,” Abramowitz added.

“We are working hard to both save a dream and Israel’s good name in the green-tech business,” Abramowitz said.

“So it is very frustrating to win the Better Place bid but not be able to sell our cars to support both the operating budget and make milestone payments to the court.”


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