item updated late March 29
‘We Can Come Back Stronger’
Citing tight finances, government demands for further information related to a planned stock offering, and a lack of time, Azure Dynamics (Toronto:AZD) gave word March 26 that it’s asked for protection from creditors via the Supreme Court of British Columbia under Canada’s Companies’ Creditors Arrangement Act. Azure said too that it will file “a voluntary petition under Chapter 15 of title 11 of the United States Bankruptcy Code to seek recognition and enforcement in the United States of the Initial Order requested in the CCAA proceedings.”
The stock offering has been be abandoned.
Azure has laid off approximately 120 of 160 workers and has closed down operations in Michigan, Boston and the UK.
“We had to retreat back to British Columbia,” says marketing VP Mike Elwood, “and begin the process of restructuring.” Azure will do so, he told F&F, with a team of about 30.
“We’re going to be lean,” he says. All of the firm’s core engineers, Elwood adds, have been retained.
Production meanwhile has ceased, including the battery electric Transit Connect by AM General and Balance hybrids by Utilimaster. Other major creditors include Ford, Johnson Controls, and Britain’s Lotus.
Future projects, like the planned development of plug-in hybrid electric versions of Ford trucks, are for now in limbo.
‘We Need to Get the Ship Turned’
“We’re not going to abandon anything, but we need to get the ship turned,” Elwood says.
He insists that he’s optimistic, that Azure’s failure to secure approval for the new stock offering forced a move that might well have been necessary anyway.
“We can come back stronger than we were before,” he says, and “grow the business in proportion to sales.”
“The decision to abandon the offering and commence CCAA proceedings comes after several weeks of formal and informal communications with staff of the Ontario Securities Commission,” Azure CEO Scott Harrison said in a release. Azure said that OSC indicated it would not approve the offering, despite the inclusion of detailed risk factor information in the proposed prospectus language.
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