January 26, 2018 - 6:26 AM
TORONTO - Electrovaya Inc. says its Litarion subsidiary in Germany has begun insolvency proceedings as a result of a cash shortage that arose after its automotive customers took longer than expected to place large battery orders.
Mississauga, Ont.,-based Electrovaya says it doesn't expect Litarion's insolvency will affect the parent company's ability to fulfil current and future customer orders for its lithium ion battery systems.
Among Electrovaya's customers is Walmart Canada, which placed a $4.3 million order last year for drop-in lithium ion battery systems to power forklifts at a distribution centre.
Prior to the Walmart Canada order in September, Electrovaya was awarded $3.8 million under a federal program to fund development of lithium ion ceramic batteries for commercial vehicles.
For the fiscal year ended Sept. 30, Electrovaya reported $11.3 million of revenue — down from $25.1 million in fiscal 2016 — and a loss of $27.2 million, more than double its year-earlier loss.
Electrovaya says its subsidiary voluntarily began insolvency proceedings after Litarion's unsuccessful negotiations with its landlord, which previously warned that its lease would be terminated Jan. 31 unless conditions were met.
Companies in this story: (TSX:EFL)
News from © The Canadian Press, 2018