Norwegian electric car maker Think got a reprieve today, receiving a bridge loan of 40 million kroner ($5.6 million) from its investors, according to Reuters, potentially saving the company from bankruptcy. But Think will likely need even more cash to keep itself up and running.
Think halted production last month, laying off between 50 and 70 percent of its workforce, with CEO Richard Canny saying that his company was in “urgent financial distress.” At the time, he was seeking a bailout from the Norwegian government, but was rebuffed. He said Think needed 100-200 million kroner in short-term guarantees to keep operating.
The biggest chunk of today’s loan comes from private equity firm Ener1 Group, which may be protecting its investment on the other side of the pond — battery producer Ener1. Ener1 Group is the majority shareholder in New York-based Ener1, which has a significant contract with Think. Other backers of the loan were not disclosed.
Back in 2007, Ener1, which makes batteries through its EnerDel unit, signed a deal to supply Think with $68 million worth of lithium-ion battery packs for Think electric vehicles in 2009 and 2010. In Ener1′s latest filing with the U.S. Securities and Exchange Commission, the company said that its revenues and profitability would take a hit if anything happened to that deal, and that it could have a “material adverse affect” on its business.
Ener1 is also looking for some loans, announcing earlier this month that it applied for $480 million in loans from the U.S. Department of Energy’s advanced vehicle incentive program.
Things could be looking up for Think, which said last month that it was planning to file for protection from creditors under Norwegian law. “The financing will allow Think to focus its efforts towards the next stages of the restructuring process,” Think told Reuters in a statement. The company said it plans to raise permanent equity capital and gradually return to volume production.
Think started production on its Think City two-seater in October, rolling out 8-10 cars per day. The company plans to build 44 cars per day when it gets up to full capacity sometime this year.