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Liberty moves to free Modec from administration
Date: Tuesday, March 8, 2011
Oxford-based Liberty Electric Cars has emerged as a potential bidder for electric vanmaker Modec, which fell into administration on 4 March.
Liberty admits it has already committed “significant resources” towards seeing how to help the stricken Coventry firm.
Managing director Ian Hobday told What Van? Liberty was considering making a move to buy Modec.
“Swift emergence from administration is vital,” he said.
In order to drive down the prohibitive costs of battery packs through creating volume, Hobday said: “It is extremely logical to us that the owner is an electric vehicle manufacturer. We are keen to see consolidation.”
He said Liberty’s technology would be positive for Modec and claimed the two firms had talked about Modec using Liberty’s E-Kit drivetrain technology before it went into administration.
Liberty stressed it was important for Modec to remain a domestically owned company to maintain the UK’s leading position in electric vehicle technology.
“I believe Modec needs to be rescued by a UK firm to secure jobs and retain engineering expertise in this country,” said chief executive Barry Shrier.
Liberty criticised the Government for failing to give the same support to electric commercial vehicles as it has to cars. Vans are excluded from the £5000 Electric Vehicle Subsidy scheme.
“The Government needs to do everything it can to make sure key players such as Modec are not allowed to fail,” said Shrier.
Hobday described it as “a tragedy” that Modec’s chief rival in the commercial electric vehicle market, Smith Electric UK, had gone into US ownership at the start of 2011.
With the US Government’s substantial backing for the electric vehicle industry, he warned Smith was likely to turn to American components suppliers.
Smith Electric Vehicles US Corp, the new owner of Smith in the UK, has just announced that it has raised $58m of funds through a private placing of shares to invest in growing its business. As yet, it has not indicated an intention to bid for Modec.
Smith will pay $5m of the proceeds as a prepayment of the monthly instalments owed for the purchase of Smith UK, resulting in a payment holiday of seven months.
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