Electric-Car Maker Coda Files for Bankruptcy to Seek Sale
By Joe Schneider & Kit Chellel – May 1, 2013 8:27 AM ET
Coda Holdings Inc., parent of the electric-car maker backed by billionaire Philip Falcone, filed for bankruptcy and will seek to sell its assets to a group led by a Fortress Investment Group LLC (FIG) unit.
Coda will focus on its energy-storage business, Chief Executive Officer Phil Murtaugh said in a statement. The Los Angeles-based company’s Coda Automotive unit listed assets of as much as $50 million and debt of as much as $100 million in the Chapter 11 filing in Wilmington,Delaware, today. The company said it will separately try to sell the unit within 45 days.
The closely held company’s Coda Automotive unit listed assets of as much as $50 million and liabilities of as much as $100 million in the Chapter 11 filing in Wilmington, Delaware, today. Photographer: Andrew Harrer/Bloomberg
Closely held Coda, which counted former U.S. Treasury Secretary Henry Paulson as an investor, positioned its vehicle as a “real world” car with better range, battery-pack life and acceleration than competitors such as Nissan Motor Co.’s Leaf, Ford Motor Co.’s Focus EV and Mitsubishi Motors Corp.’s i-MiEV hatchbacks.
The nascent U.S. market for battery-only cars shrank last year to about 5,000 units sold through August, compared with about 6,300 in the same period of 2011, according to data compiled by Bloomberg. About 87,000 electric and plug-in hybrid cars have been sold in the U.S., with two years until the deadline for President Barack Obama’s target of 1 million sales for the industry.
Coda had raised $320 million in private funds, Murtaugh said in September. Investors included New World Strategic Investment Ltd., Indus Capital and Och-Ziff Capital Management Group LLC (OZM), Aeris Capital, Angeleno Group LLC, Falcone’s Harbinger Capital Partners LLC and Riverstone Holdings LLC, Coda said in 2011.
A U.S. congressional committee is investigating the Energy Department’s loans for alternative-fuel vehicles after the manufacturers have been plagued by financial problems. A123 Systems Inc., a battery supplier to Fisker Automotive Inc., another California-based maker of electric cars, filed for bankruptcy in October.
A123, based in Waltham, Massachusetts, used $132 million in federal grant money to build two plants in Michigan. Fisker fired three quarters of its work force last month and missed its first payment on a U.S. government loan.
Coda sought to win at least 15 percent of non-luxury electric-vehicles sales, Murtaugh said in a September interview. The Coda compact, which cost $37,250 before a $7,500 U.S. tax credit, averages 88 miles (142 kilometers) per charge and can travel as far as 125 miles, according to U.S. Environmental Protection Agency estimates.
The Coda sedan’s chassis is built in Harbin, China, through a partnership with Hafei Motor Co., with final assembly in Benicia, California. Lithium-iron-phosphate cells for its 1,000- pound (454-kilogram) battery pack are from LIO Energy Systems, a joint venture of Coda and China’s Tianjin Lishen Battery.
Coda said in April 2012 that it would produce battery- powered autos with China’s Great Wall Motor Co. that would be sold under the U.S. company’s name starting in 2014.
The case is In re Coda Automotive, 13-bk-11154, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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