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Coda Declares Bankruptcy: Quits Auto Business; Focusing on Energy Storage
Jeff Cobb May 1, 2013
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Today Coda Holdings, Inc,. announced it was restructuring via voluntary Chapter 11 bankruptcy as a means to exit the automotive side of its business and focus on the energy storage systems side.
As filed in the District of Delaware, Coda Holdings has made arrangements to be sold to FCO MA CODA Holdings LLC, an affiliate of Fortress Investment Group.
This group of lenders intends to keep Coda operational via debtor-in-possession (DIP) financing during a process estimated at 45 days.
Assuming the bankruptcy court approves, the lenders will then buy the company – reportedly for $25 million – and sell off the remaining assets of Coda’s automotive side.
Coda says the energy storage market essentially offers lower hanging fruit in which it can remain profitable, and says it “is currently shipping product, and has a robust pipeline of new customers and existing installations in the field.”
“After concluding a comprehensive review of our strategic options, the Board of Directors, management team and senior lending group have concluded that focusing on the Company’s energy storage business presents the best opportunity moving forward,” said Phil Murtaugh, chief executive officer, Coda Holdings, Inc. “We believe the restructuring process that we have entered into today will enable the Company to complete a sale and confirm a Plan that maximizes the value of its assets, serving the best interests of our stakeholders.”
Last March Coda delivered the first of its limited-market, five-passenger sedans that were marked by bland styling and rather high prices compared to Nissan’s Leaf.
They did promise higher electric range which Coda said could crest from as much as 125 or more miles per charge, but the the U.S. Energy Department rated the Coda sedan at 77 MPGe city, 68 MPGe highway, and 73 MPGe combined, on par with the Leaf.
Market acceptance for the Coda sedan was challenged; it did suffer a recall for an airbag assembly, and the company struggled to raise capital in the face of stagnant sales.
As for the energy storage systems side of the business, Coda had already diversified its business and formed CODA Energy two years ago.
The Los Angeles-based company says it will live on building modular and thus scalable custom energy storage units based on the same lithium-ion technology and thermal management systems as found in the cars.
Uses for its energy storage include power generation, distribution and behind-the-meter applications for commercial, residential and industrial end users.
“Coda’s Energy’s products feature a modular design that provides reliable, secure, cost-effective solutions for a wide range of energy and power needs,” says the company in a self-description blurb, “including peak shaving, load leveling, renewable energy integration, frequency regulation, voltage support, and transmission and distribution (T&D) upgrade deferral.”
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Tagged as Coda bankrupt, Coda bankruptcy, Coda energy