Ebusco's Survival Hangs on €36 Million Rights Issue
Deurne, Friday, 15 November 2024.
Dutch electric bus maker Ebusco faces a critical juncture as it launches a €36 million rights issue to stave off insolvency. Following a court ruling allowing Qbuzz to cancel a major order, Ebusco has largely suspended production and seeks investor support to implement its turnaround plan by Q1 2025.
Financial Turmoil and Legal Setbacks
Ebusco’s financial distress became evident after the court ruling on 23 October 2024, which permitted Qbuzz, a major client, to cancel an order for 59 electric buses. This decision has severely impacted Ebusco’s financial standing, as the company had already manufactured 45 of these buses, each valued at €500,000. The inability to prove imminent delivery led to the court’s decision, pushing Ebusco into deeper financial trouble[1][2].
Strategic Measures and Shareholder Decisions
In response to this crisis, Ebusco has announced a €36 million rights issue, a crucial component of its turnaround plan. The rights issue, detailed in a prospectus approved by the Netherlands Authority for the Financial Markets on 8 November 2024, is structured as a 3-for-1 offering at an issue price of €0.8209 per share. This represents a 48% discount to the theoretical ex-rights price based on the closing price of €3.85 on 7 November 2024[3][4].
Investor Support and Financial Outlook
Key investors, including Peter Bijvelds Holding Erp B.V., have shown interest in the rights issue, with commitments amounting to several million euros. Despite these commitments, analysts predict that convincing enough investors to support the plan will be ‘extremely difficult,’ given the financial instability and the significant dilution of shares—up to 75%—that could occur if shareholders do not exercise their rights[2][3].
Operational Impact and Future Prospects
The company’s future hinges on the success of this rights issue. If Ebusco fails to raise the targeted funds, it risks insolvency, which would lead to a cessation of current operations. The company plans to use the proceeds to address working capital shortfalls, settle overdue accounts, and cover operational costs until at least the end of Q1 2025. Ebusco has also entered negotiations to sell the 61 canceled buses and explore strategic partnerships, including a potential equity participation with Chinese battery manufacturer Gotion, to stabilize and expand operations[4][5].