German subsidiary of Canadian lithium-ion battery maker Electrovaya insolvent
The Toronto-area cleantech company said the cash shortage is the result of fewer than expected orders from automotive clients
TORONTO—Electrovaya Inc. says its Litarion subsidiary in Germany has begun insolvency proceedings as a result of a cash shortage that arose after its automotive customers took longer than expected to place large battery orders.
The Mississauga, Ont.-based company says it doesn’t expect Litarion’s insolvency will affect the parent company’s ability to fulfil current and future customer orders for its lithium ion battery systems.
Among Electrovaya’s customers is Walmart Canada, which placed a $4.3 million order last year for drop-in lithium ion battery systems to power forklifts at a distribution centre.
Prior to the Walmart Canada order in September, the cleantech firm was awarded $3.8 million under a federal program to fund development of lithium ion ceramic batteries for commercial vehicles.
For the fiscal year ended Sept. 30, Electrovaya reported $11.3 million of revenue—down from $25.1 million in fiscal 2016—and a loss of $27.2 million, more than double its year-earlier loss.
Electrovaya says its subsidiary voluntarily began insolvency proceedings after Litarion’s unsuccessful negotiations with its landlord, which previously warned that its lease would be terminated Jan. 31 unless conditions were met.