Tritium asks Qld government for up to $90m bailout

[Vostok]

But not for much.. post the consolidation (which ended up being 200:1) the share price had continued to fall.

When I looked at it on Monday the market cap was under US$4 million. And they'd received another notice from Nasdaq because seeming the consolidation reduced their shares on issue to below Nasdaqs minimum.

Everything has value, even if that value is not high. Tritium would still have valuable IP and a customer list and presumably binding contracts to continue supplying parts and spares to a number of network operators, i.e. generate ongoing revenue.

The tricky bit will be reining in the costs of running the company. If Tritium never had a near-term pathway to becoming profitable then it may be challenging for the administrators to identify ongoing costs that can be trimmed or removed without completely neutering what the company does.

FWIW - I don’t think a company should ever need to enter administration. Because all that means is the administrators will make decisions on what happens next - not management - in order to either save the company or liquidate it.

So if for example administrators can work out how to save the company, what was stopping management making those same decisions to do exactly the same thing, save the company, and never needing the administrators in the first place?

 

[RichardV]

Everything has value, even if that value is not high. Tritium would still have valuable IP and a customer list and presumably binding contracts to continue supplying parts and spares to a number of network operators, i.e. generate ongoing revenue.

The tricky bit will be reining in the costs of running the company. If Tritium never had a near-term pathway to becoming profitable then it may be challenging for the administrators to identify ongoing costs that can be trimmed or removed without completely neutering what the company does.

FWIW - I don’t think a company should ever need to enter administration. Because all that means is the administrators will make decisions on what happens next - not management - in order to either save the company or liquidate it.

So if for example administrators can work out how to save the company, what was stopping management making those same decisions to do exactly the same thing, save the company, and never needing the administrators in the first place?

I don't think it is that simple. The board and directors cannot continue to trade to try and trade themselves out of insolvency. Who knows what the tipping point here actually was. But for some companies it might be one large contract that they were almost banking on falling through or even just being delayed. Administrators have a bit more leadway here and can help make an unbiased view to whether the company is able to trade its way out of insolvency or sell off any IP and assets to get the best result for creditors and then investors.

 

[cafz]

They failed because they had a sub-standard, unreliable product that was universally hated by customers in Europe and Australia. Instead of listening to customers and fixing the problem, including providing more spare parts, they just skated on government subsidies and then moved out of Australia.

Nah. They failed because they tried to execute a massive growth strategy using cheap finance, and then widespread global inflation resulted in sharply increased interest rates so that cheap finance suddenly got expensive.

I'm old enough to remember the ABB and Delta fast chargers being just as unreliable, and that's before we even talk about all the different brands of AC chargers that have been frequently found broken over the years. Tesla Destination Chargers sitting there with broken cables or red light flashing for months aren't because Tesla can't supply spares! Frankly I'm a cynic and expect the Kempower chargers to end up just the same in the hands of marginal operators.

 

[moa999]

Lenders have now appointed receivers.

"Sad day:" EV fast-charging company Tritium says it is insolvent, receivers to seek buyers

Updated: Australian EV fast charging company Tritium is facing financial collapse after its directors declared it to be insolvent and called in KPMG to act as voluntary administrators.

thedriven.io

Sounds like Trevor St.Baker has some large loans to he company as well.

Wouldn't be surprised to see some combination of St.Baker and some of its large customers like Evie (also controlled by St.Baker), Ionity in Europe and Revel in the US buy it - after all they have the most at risk in sunk costs.

Pulling their June 2023 financials they had about US$25m of cash and US$200m of debt.
Also inventory of US$140m.

Had recently been borrowing under a bridge loan at 15% interest.

 

[Craig 128]

The tricky bit will be reining in the costs of running the company. If Tritium never had a near-term pathway to becoming profitable then it may be challenging for the administrators to identify ongoing costs that can be trimmed or removed without completely neutering what the company does.

One of the problems was the cost to manufacture in Australia and freight to the rest of the world. Australia is the highest cost economy in the OECD for manufacturing. They were too slow to close manufacturing in Australia (Dec 2023) and shift it off shore.

As I mentioned earlier, Taiwan based LiteOn Corporation with a market cap somewhere around 12 billion AUD was looking at the books to see if they wanted a stake. I wouldn't be supprised, if they decided to wait until they went belly up. They could potentially buy Tritium, move manufacturing to Taiwan (not sure if they would keep the Tennessee factory).

Tritium has also consolided their product lines into a single chasis and common parts - the RTM and PKM lines.

They were doing the right things to improve margins, just far to slow. As Cafz says, the cost of debt caught up with them at the same time.

 

[moa999]

not sure if they would keep the Tennessee factory).

They need the US factory to sell in the US under the NEVI program.
Eg. $10m sales in Tennessee - Tritium Customers Win Largest Share of Round 1 Tennessee NEVI Program | Tritium

 

[Vostok]

One of the problems was the cost to manufacture in Australia and freight to the rest of the world. Australia is the highest cost economy in the OECD for manufacturing. They were too slow to close manufacturing in Australia (Dec 2023) and shift it off shore.

How many millions did the previous Government throw Tritium’s way, one of our few home-grown tech companies, in order to set it on a more sure footing? Did ScoMo ever do a photo-op there?

Plenty of bucks though for fossil fuel companies. Including $2 billion to keep two oil refineries here, despite our “high cost economy”.