Insolvency proceedings opened for e.GO Mobile
Insolvency proceedings have now opened in Germany for the assets of the electric car manufacturer e.GO Mobile under its own administration. e.GO Mobile filed for a preliminary self-administration procedure in early April this year.
e.GO Mobile announced that it is suspending production and all development activities for the month of July, “to protect the insolvency assets”. For the e.GO Life, sales, test drives, customer service and after-sales service will all continue, as will discussions with potential investors.
In the self-administered insolvency proceedings, the Board of Management will remain responsible for operations. Since April, Paul Fink from the law firm FRH that specialises in restructuring and insolvency law has also been involved with the Aachen-based e.GO Mobile as a general representative. With the opening of the insolvency proceedings, the court has now also appointed a trustee, a task which will be assumed by Biner Bähr from the law firm White & Case.
The company says that without production and development, short-time working arrangements (shorter working times) are planned for the employees concerned. As one might expect, the company avoided further statements concerning the near future. However, as the Aachen Local Court has granted the application for insolvency in self-administration filed in April, e.GO Mobile’s view was confirmed that the company still has a “positive future forecast”.
That being said, time is pressing as the Aachener Zeitung newspaper writes: An auditing company had calculated that the board of directors would have to raise a high double-digit million amount by the end of July in order to resume operations and continue them until the middle of next year. “We’ll manage that”, e.GO founder Günther Schuh is said to have told the newspaper without revealing the amount concerned. Three scenarios are outlined in the report: A management buy-out by Schuh and some confidants, the entry and takeover by a major investor or – if no investor can be found – the liquidation of the company.
In the company’s statement, Schuh is somewhat more reserved but still optimistic. “In recent months we have held many promising discussions with both national and international investors,” says Schuh. “We are therefore confident that with a little more time, we can find a good solution.” The interest in the e.GO Life electric car is still very high.
At the end of June, Schuh had still told the Berliner Zeitung that they were on the verge of breaking into profit margins with the Life model. “In March, if Corona hadn’t come, we would have delivered more than 250 vehicles for the first time,” said Schuh. According to Prof. Schuh, a positive operating result could have been achieved in three or four months. But the Corona pandemic, he said, has frustrated all plans – including the planned joint venture with an unnamed Chinese investor. According to Schuh, a positive operating result would have “opened the door to completely different investors”.
On the other hand, other companies are quickly catching up to e.GO in terms of development – some established manufacturers are now also building e-small cars, and at a lower cost and in some cases with competitive technical data. Nevertheless, e.GO Mobile still has a head start in the very small car department, and has expanded its sustainable transport palette with the e.GO Moove as a cargo and people-mover. This year, the joint venture of ZF and e.GO Mobile was planning to complete the homologation of the e.GO Moove in the vehicle classes M2 (People Mover) and N1 (freight transport) which should come with a fuel cell range extender on request.
Including reporting by Sebastian Schaal, Germany