Ecotality Inc. (ECTY:US), a maker of charging stations for electric cars, filed for bankruptcy with plans to sell itself at a court-supervised auction to pay off debt.
A unit of the company, Electric Transportation Engineering, listed assets valued at as much as $50 million and debt of as much as $500 million in a filing yesterday in U.S. Bankruptcy Court in Phoenix. The company operates a network of electric-vehicle charging stations under the Blink brand name.
“While today’s bankruptcy filing is regrettable, it is a necessary step to ensure that we continue meet the needs of Blink customers and continue to operate the Blink network,” Chief Executive Officer Ravi Brar said in a statement.
In August, the company warned investors that it might be forced into bankruptcy, partly because of weaker-than-anticipated sales (ECTY:US) and a failure to release a new version of its Minit Charger this year.
The biggest unsecured creditor listed is the U.S. Energy Department, owed $6.5 million under a government contract that Ecotality is disputing. The San Francisco-based company also said it has two cost-sharing grants with the agency totaling $126.6 million.
The company plans to put all of its assets up for sale at an auction overseen by the court. Before it filed, eight potential bidders signed confidentiality agreements giving them access to Ecotality financial data so they could decide whether to submit an offer.
“There is great value in the Blink network of over 4,000 commercial charging stations,” Brar said. The company said it also has installed more than 8,000 charging stations in the homes of electric vehicle owners.
Because of a cash shortage, the company decided to file for bankruptcy before the auction process began, according to court papers.
“Significant liquidity constraints and the difficulty of obtaining long-term financing” led Ecotality to pursue an asset sale rather than a reorganization, the company said.
Nissan North American Inc. agreed to lend the company $1.25 million to help fund the bankruptcy, according to court records. The loan and any rules governing the auction must be approved by the court.
The case is Electric Transportation Engineering Corp., 13-bk-16126, U.S. Bankruptcy Court, District of Arizona (Phoenix).
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