Proterra Inc. announced it is taking action to maximize the value of its business and enhance the potential of each of its product lines by voluntarily filing for protection under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware.
The move is an effort to strengthen its financial position through a recapitalization, or going-concern sale, according to the company.
The company intends to continue to operate in the ordinary course of business as it moves through this process and plans to file the customary motions with the Bankruptcy Court to use existing capital to fund operations, including paying employee salaries and benefits, and compensating vendors and suppliers on a go-forward basis in accordance with Chapter 11 rules, all while ensuring business continuity for customers.
“Proterra is at the forefront of the innovations that are driving commercial vehicle electrification. We know we’re building industry-leading products that our customers want and need,” said Gareth Joyce, Proterra CEO. “The foundation we have built has set the stage for decarbonization across the commercial vehicle industry as a whole, and we recognize the great potential in all of our product offerings to enable this important transformation. This is why we are taking action to separate each product line through the Chapter 11 reorganization process to maximize their independent potential.”
Proterra introduced zero-emission, electric transit buses to the North American market in 2010, which have now cumulatively amassed more than 40 million real-world service miles and displaced over 180 million pounds of CO2 emissions.
Today, the company’s battery technology is powering more than 20 commercial vehicle applications, spanning Class 3 cargo vans through to Class 8 semi-trucks, as well as off-highway equipment in the construction and mining segments, in the U.S., European, and Asia-Pacific markets. The company has further installed more than 100 megawatts of heavy-duty EV charging infrastructure to support commercial vehicle fleets across North America.
“While our best-in-class EV and battery technologies have set an industry standard, we have faced various market and macroeconomic headwinds that have impacted our ability to efficiently scale all of our opportunities simultaneously. As commercial vehicles accelerate towards electrification, we look forward to sharpening our focus as a leading EV battery technology supplier for the benefit of our many stakeholders,” said Joyce.
Continuing its Plan to Charge Ahead
In January, the company said it would cut 300 jobs, shutter its California plant, and move the manufacture of its battery and bus manufacturing to its South Carolina facility as a cost savings move.
As a result of the announcement, Proterra said it will no longer be holding an earnings conference call that was scheduled for August 9.
Moelis & Company LLC is acting as the Company’s investment banker; FTI Consulting as financial advisor; and Paul, Weiss, Rifkind, Wharton, & Garrison LLP is acting as legal advisor.