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Ener1 stock takes beating after Think write-down

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The stock market has punished battery maker Ener1 since executives revealed a $73 million write-down on its stake in Think, the electric car company.

Shares of Ener1 hit a new 52-week low of $1.42 before closing at $1.52 on May 13.

The company reported on May 10 a first-quarter loss of $84.7 million. Net sales were $23.1 million, up 110 percent from the year-ago quarter.

Ener1, which engineers and builds its lithium-ion batteries in the Indianapolis area, is the exclusive supplier for Think, a privately held Norwegian company that began assembling its City car in Elkhart last year. Ener1 also became one of Think’s key financial backers.
 

OTB manufacturing Ener1, the parent company of Indianapolis battery maker EnerDel, wrote off its investment in Think, an electric car. (IBJ File Photo)

“Think faces the need to recapitalize its go-forward business plan,” Ener1 CEO Charles Gassenheimer said during a conference call. “While Think faces this challenge, Ener1 will be guided by two principles: No additional funds will be provided to Think by Ener1, and Ener1 will try to avoid consolidating or increasing its equity exposure to Think.”

Most of Ener1’s first-quarter loss was a $59.4 impairment charge on Think equity. Ener1 wrote down another $13.9 million on financial instruments, “primarily as a result of the impairment charge.”

The total write-off was $73.3 million.

Gassenheimer said Ener1 decided to write down its equity position because of Think’s inability to raise additional capital and its longer-than-expected delay in re-starting operations.

Ener1 halted battery production for Think earlier this year because the carmaker needed to work through a backlog. The stoppage contributed to Ener1’s layoffs in March, which affected 3 percent of 770 employees worldwide. (The number of people laid off at offices in Indianapolis and a Mount Comfort manufacturing plant were not disclosed.)

Ener1 realized last year that its business wouldn’t survive on selling to the electric car market, and it has shifted its emphasis to electric utilities and heavy-duty vehicles.

Gassenheimer reassured investors that Ener1 has the resources to finance the rest of its business plan. He expects Ener1 to post positive EBITDA (earnings before interest, taxes, depreciation and amortization) this year.

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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