European-based bus manufacturer Ebusco has unveiled its new ‘Turnaround Plan’ to rectify its precarious financial situation following the loss of a crucial court case in Utrecht, the Netherlands.
Earlier this week, bus operator Qbuzz was allowed to terminate its agreement with Ebusco to purchase 45 electric buses after Ebusco originally initiated legal proceedings to receive payment.
On October 21, Ebusco said that losing the order would “put a significant strain on its working capital position”, with the plan being to raise up to 36 million Euros through a rights issue offering.
The legal proceedings came after Qbuzz cancelled its order for 59 buses, 45 of which are 12m buses.
Following the court decision, pre-judgment attachments placed on some of Ebusco’s bank accounts have now been lifted, meaning Ebusco can once again access these accounts.
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At its shareholder meeting that came after the court case loss, Ebusco announced a Q3 trading update and further details on its ‘Turnaround Plan’, with the company deciding to become an Original Equipment Design (OED) manufacturer that designs and engineers its models in-house before contracting manufacturers to produce the vehicles.
This also means Ebusco will continue to focus solely on the European market for its sales and marketing, with Ebusco aiming to reach a gradual increase of the monthly run rate to 40-50 buses by the end of 2025, alongside a structural annual cost reduction of approximately 30 million Euros.
The meeting also saw chief financial officer Jurjen Jongma step down following the completion of the court case, with Jongma having been on board for two capital injection rounds.
“Ebusco is going through a very difficult phase. Despite being aware of the difficulties, I chose to join Ebusco in September, driven by the company’s potential. The Ebusco buses have shown excellent performance, including through the lowest energy consumption in the market,” Ebusco CEO Christian Schreyer says.
“With my deep familiarity and experience in this industry, I can confidently say that Ebusco’s products have tremendous potential. However, I recognize that this potential has not been properly utilised, as Ebusco is facing financial challenges along the way. We need to turn Ebusco around.
“Together with the Ebusco team, we have developed a plan to create a leaner organisation, restore the trust in Ebusco as a company for all our stakeholders and restore our financial health. With the shift in manufacturing strategy, Ebusco will concentrate on the engineering of its products and inhouse casco production, while outsourcing the assembly activities to experienced contract manufacturers.
“I am fully focused on implementing the Turnaround Plan. I believe that with this approach, our proven products and the support of our shareholders and the capital markets, Ebusco is well-positioned to meet the ongoing high demand for electric buses in the European market.”
As part of his appointment as CEO, Schreyer also receives 300,000 Ebusco shares that will vest in three years after his appointment, provided that he’s still working as CEO at that time.
Ebusco has also consolidated its five shares to one to increase the market value per ordinary share and to facilitate its ongoing rights issue.
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