Ideanomics plans Chapter 11 reorganisation
Between 2021 and 2023, the company spent 320 million dollars on investments in electric vehicle technology. This includes, for example, the electric van manufacturer Via Motors, the tractor manufacturer Solectrac (with its own plant for over 4,000 electric tractors per year), the Italian electric motorbike manufacturer Energica, and US company Wave, which develops inductive charging systems for electric commercial vehicles. In 2021, Ideanomics‘ shares were trading at over 600 dollars as private investors’ interest in electric mobility increased.
As Reuters now writes, most of these investments were unprofitable. At the time of the Chapter 11 filing, Ideanomics had 30 million dollars in debt but only 189,000 dollars in cash on hand. The company is said to have lost over 800 million dollars in the past five years. Against this backdrop, it is now clear why Ideanomics did not continue to invest in Energica when the electric motorbike manufacturer went bankrupt in October.
Energica is not alone in this: according to the Reuters report, Ideanomics has closed all acquired companies, with the exception of Wave, and laid off all but 17 employees. There are two reasons why Wave is still in operation: Firstly, the Antelope Valley Transit Authority in California is already using the Wave system. Secondly, it has already found a potential buyer.
Ideanomics has received an insolvency loan totalling eleven million dollars from Tillou Management and Consulting. Reuters quotes from court documents that Ideanomics wants to sell Wave to Tillou unless it can find another buyer who offers more money for Wave. Tillou is backed by former wrestling manager Vince McMahon, who is married to Linda McMahon – whom US President-elect Donald Trump has nominated as Secretary of Education for his second term.
Chapter 11 of the US Bankruptcy Code is a creditor protection procedure. Ailing companies are thus protected from creditors for a certain period of time to reorganise themselves. Chapter 11 recently made headlines in connection with Northvolt’s insolvency, and the case of General Motors is also well-known in the automotive industry. While it is clear what the aim of the reorganisation is in the case of Northvolt, this can be doubted in the case of Ideanomics, when virtually all business branches have been scrapped, and the only remaining subsidiary is to be sold.
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