Better Place’s new owners have until this week to pay the court

Having won the government tender to take over the bankrupt electric vehicle company Better Place, solar power entrepreneur Yosef Abramowitz and fellow investor Harry Shiner now have to pay for their purchase.

Abramowitz and Shiner, representing a group of Better Place car owners that calls itself the Association for the Promotion of the Electric Car, acquired the bankrupt company from the liquidators for some NIS 18 million (less than $5 million). Led by Arava Power co-founder Abramowitz, who has been working closely with Efi Shahak, a Better Place car owner, the car owners’ association’s overall aim is to have Better Place declared a national infrastructure project that will eventually become a technology and service platform for all electric vehicles in the country.

But first, Abramowitz and Shiner have to pay the court that NIS 18 million.

According to financial newspaper Globes, the court has given them until Tuesday, August 6, to settle the payment. Shiner reportedly said he would pay NIS 2 million toward the liquidation payments by Monday, money that would be used to pay salaries and rent for Better Place.

Abramowitz said he has received more than $30 million in financing offers from investors in the US and Canada. It could, however, take 30 to 60 days to finish the due diligence on those offers. While there are offers in writing, as well as several “likely” strategic offers from investor groups in Israel, a Canadian offer for the first $9 million is the “most advanced,” wrote Abramowitz from the US.

“We’re overwhelmed with investor interest because we are offering investor-friendly terms,” Abramowitz told The Times of Israel. “We have cut the burn of the company and the value of the intellectual property alone is multiples of what we won the bid at.”

Abramowitz was referring to the burn rate, the negative cash flow or how fast a company uses up its funding. Better Place burned through more than $800 million in five years, and sold barely 2,000 of its electric cars, which was why Abramowitz was able to buy the company for a mere fraction of its actual worth.

The solution to his cash flow crunch, texted Abramowitz, is to sell 200 Better Place cars at NIS 70,000 (around $19,500) each, which would yield NIS 14 million and ease the cash flow issues. The cars, bulky Renault Fluence sedans that drive with a soft purr, usually cost NIS 160,000 ($44,000).

There are currently 350 remaining Better Place cars available for purchase, most of them sitting in the Eilat port, said Abramowitz, noting that there is a list of reportedly more than 500 drivers waiting to buy the cars.

The various ministries haven’t released the cars for the last three weeks, said Abramowitz, creating a bottleneck in the company’s operating budget as well a delay in the payment to the court.