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Ener1 exits bankruptcy under private ownership

Kathleen McLaughlin
March 30, 2012
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Ener1 is now a privately held company with $86 million in new funding and will continue trying to market its battery technology, which has roots in Indiana.

The company announced Friday that it had completed a restructuring and emerged from Chapter 11 bankruptcy. The U.S. Bankruptcy Court in the Southern District of New York confirmed Ener1’s reorganization plan on Feb. 28, and it became effective Friday.

Ener1 operates its EnerDel subsidiary out of a Hague Road headquarters, and it has had manufacturing operations in Noblesville and Cumberland. Company spokesman Brian Sinderson recently said he could not disclose the local headcount or other details of Ener1's operation until the exit from bankruptcy was complete. He could not be reached for comment Friday afternoon.

EnerDel inherited its lithium-ion battery technology from Delphi, which had a stake in the company until selling it to Ener1 in 2008. New York-based Ener1 had hoped to scale up the business and hire as many as 1,400 people in Indiana, but its bet on a small electric-car company, Think, proved to be its downfall. Ener1 sought bankruptcy protection in January.

The company now focuses on grid backup, commercial vehicles and industrial markets.

"We have emerged from bankruptcy with significantly less debt, more working capital and a stronger financial position to enable us to compete more effectively in pursuing business opportunities to provide energy storage solutions for electric grid, transportation and industrial applications,” interim CEO Alex Sorokin said in a prepared statement. “We are grateful for thestrong support of our primary investors, customers, employees and suppliers throughout this process."

Ener1 said it restructured its long-term debt and secured up to $86 million of new equity funding, which will support the continued operation of its subsidiaries. In addition to the new equity funding, the holders of the existing senior notes, the convertible notes and a line of credit have restructured their debt in a partial debt-for-equity exchange.

Ener1's common stock, which had traded over the counter with the ticker symbol HEVV, was cancelled effective Friday. Holders of the cancelled stock received nothing.

The company issued new shares of preferred stock in exchange for the new equity funding and in repayment of a debtor-in-possession loan.

The existing senior notes were exchanged for a combination of cash, new common stock and new notes, while the convertible notes were exchanged for a combination of cash and new common stock.The amount due under theexisting line of credit was cancelled in exchange for new common stock.

 

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