Israeli Electric Car Venture May Have Reached the End of the Road

Israel Corporation might pull the plug on the electric car company Better Place in the coming days, as the company suffers significant losses.

Yoram Gabison
Yoram Gabison
Send in e-mailSend in e-mail
Yoram Gabison
Yoram Gabison

The automotive venture,Better Place started by founder Shai Agassi and Israel Corporation controlling shareholder Idan Ofer may come to an end in the coming days. Israel Corporation holds 30 percent of Better Place shares, while Ofer has an eight percent stake in the company.

Ofer is currently in talks with other investors in Better Place such as Morgan Stanley, HSBC and General Electric, and unless the other shareholders can come up with some additional capital to inject into the company, Israel Corporation's board – which will convene in order to approve the financial reports for the first quarter of 2013 – is likely to stop financing Better Place, bringing its activities to an end.

If Israel Corporation injects more funds into the company, one of the institutional investors that holds more than one percent of the company's shares may convene a special meeting to approve the transfer. This process will require the majority approval of the minority shareholders, which is liable to end in a resounding failure that will pour more salt on Ofer's wounds – as he pushed for the investment in Better Place.

Better Place has implemented its electric-car infrastructure in Israel and Denmark, and employs around 500 workers. Since it was established it has lost $812 million, and at the end of 2012 held $34 million in cash. Israel Corporation recorded a $191 million provision for the company in its financial statements for the last quarter of 2012, and reduced Better Place's enterprise value to zero following a valuation by the Giza Singer Even advisory and investment firm.

So far Israel Corporation has invested $293 million in the company, which lost $251 million in the last quarter of 2012, and $454 million over the entire year. It recorded shrunken revenues of $7 million that year.

Israel Corporation says in response: "Better Place is continuing in its efforts to raise the required capital in order to continue operating. No decision has been made yet about its future."

A charging station for Better Place's electric car. Credit: Tomer Appelbaum

Click the alert icon to follow topics:

Comments

SUBSCRIBERS JOIN THE CONVERSATION FASTER

Automatic approval of subscriber comments.

Subscribe today and save 40%

SUBSCRIBE
Already signed up? LOG IN

ICYMI

The Orion nebula, photographed in 2009 by the Spitzer Telescope.

What if the Big Bang Never Actually Happened?

בן גוריון

'Strangers in My House': Letters Expelled Palestinian Sent Ben-Gurion in 1948, Revealed

AIPAC

AIPAC vs. American Jews: The Toxic Victories of the 'pro-Israel' Lobby

Bosnian Foreign Minister Bisera Turkovic speaks during a press conference in Sarajevo, Bosnia in May.

‘This Is Crazy’: Israeli Embassy Memo Stirs Political Storm in the Balkans

Hamas militants take part in a military parade in Gaza.

Israel Rewards Hamas for Its Restraint During Gaza Op

Palestinians search through the rubble of a building in which Khaled Mansour, a top Islamic Jihad militant was killed following an Israeli airstrike in Rafah, southern Gaza strip, on Sunday.

Gazans Are Tired of Pointless Wars and Destruction, and Hamas Listens to Them