A group of U.S. and Canadian businessmen partnered with electric-car owners themselves submitted the winning bid to buy Better Place, the bankrupt electric-car venture founded by high-tech entrepreneur Shai Agassi.
The group will be paying NIS 18 million for the company and another NIS 25 million for its intellectual property. Better Place was established at an investment of $800 million.
The Lod District Court approved the purchase of Better Place’s electric-car infrastructure by a group that includes Yosef Abramowitz, one of the owners of Arava Power. He partnered with Canadian businessman Henry Shiner and intends to partner with a foundation comprised of Better Place’s customers as well.
Abramowitz’s group won even though its bid was close to that of the other leading bidder, due to the former’s commitment to the bankrupt company’s customers. Abramowitz’s group also committed to paying more quickly and promised to pay 20% of all future revenues into the liquidator’s fund for two years.
“It may look like this is a low price for a luxury boat, but you need to remember that this ship sank,” an attorney involved in the liquidation process said.
The second group dropped out of the bidding after the court accepted the recommendation of Better Place’s liquidators, attorneys Shaul Kotler and Sigal Rozen Rechav, to accept the other bid.
Initially 70 companies expressed interest in Better Place, 30 of which signed confidentiality agreements to obtain more information. The second group includes Tsahi Merkur, the owner of Success Parking.
According to Rozen Rechav, both offers included the acquisition of all charging stations. Not all battery replacement stations would be purchased, leaving only 15 operational. Abramowitz’s group committed to operating these for two years, while Merkur made no such commitment.
Abramowitz said he intended to open the company’s charging network to all electric cars, even those that are not Better Place customers. Once the company sells 5,000 electric cars, its operations will no longer be losing money, he added.
Currently, though, the company has only 1,000 customers. It has at its disposal only 350 cars to sell, which are languishing in customs.
Abramowitz added that he’s buying Better Place out of Zionist motives, and that he wants to turn Israel from the startup nation into the electric-car nation. The company will receive a new name via a competition to be held on Facebook, he added.
Abramowitz’s group agreed to assume clients’ debts and to employ 50 of the company’s employees. It also intends to maintain some of the company’s office space in Rosh Ha’ayin.
Even after shutting some stations and reducing its manpower, Better Place’s operating expenses will come to millions of shekels a month. The company’s revenues are currently only NIS 1 million a month.
In addition, it lost its license to import Renault vehicles.
Neither offer met the demand for a bank guarantee covering 10% of the assets. Abramowitz’s group offered to cover NIS 1 million and Merkur only NIS 500,000. There are no personal guarantees for either offer, but Abramowitz says he would deposit another NIS 2 million.
The company’s intellectual property rights are being sold to Abramowitz’s group for NIS 25 million in a first payment and NIS 100 million in royalties deriving from patents.
Kotler said the fact that the company was kept operational since it declared bankruptcy several weeks ago helped in getting these offers. Keeping the company operational will guarantee that its creditors receive some money, he said.