Ebusco starts legal proceedings against customer for payment of 45 buses

Ebusco announces it has initiated legal proceedings against a customer for payment for 45 buses. The Dutch company has largely suspended its production in anticipation of the outcome of the court hearing and the completion of the contemplated rights issue “to preserve its working capital”.

In a press release shared in the early morning of today, 21st October, Ebusco states that “today, a court hearing takes place in preliminary relief proceedings initiated by Ebusco to seek delivery to and payment from the customer for the 45 12-metre buses”. Name of customer is not mentioned.

In a few words, Ebusco asks to be allowed to deliver the 45 buses and to be paid for these.

This procedure is related to the fact that the OEM “has received notice from one of its customers to cancel orders of 59 buses, 45 of which are 12-metre buses. All of these 12 metre buses are produced, with 30 being in the Netherlands / Europe available for delivery. The remaining buses comprise 10 which are in transit to and 5 which are about to be shipped to the Netherlands”.

Ebusco towards bankruptcy?

Ebusco plans to raise up to EUR 36 million through a rights issue offering, as announced in September. Also, Ebusco‘s Supervisory Board has appointed Christian Schreyer as new CEO in the framework of the turnaround plan put in place by the company’s Executive Team. Founder Peter Bijvelds and Michiel Peters stepped down as Co-CEO’s on 2 September.

Speculations about Ebusco’s insolvency are gaining space. The company’s half 2024 financial results show EBITDA loss of €60.7 million (increased 40% compared to 43 in 2023) and revenue at €38 million (-8.8%). Just 98 buses were delivered, vs a order book of as many as 1,662 buses. “Scaling up with contract manufacturers has been hampered by start-up inefficiencies”, said the company, that is pivoting to a new strategy based on assembly of 3.0 model in China being made by a external partner, as stated during the presentation of 2023 results in March this year.

Ebusco shares have today a value of 0.70 €, and witnessed a -88% decrease in the last 12 months. The loss compared to the time when the company went public (October 2021) is -97%, as Ebusco’s shares value at that time was around 23 euros.

Ebusco starts legal proceedings

Ebusco adds that it “started legal proceedings to seek a quick resolution of this dispute ahead of the launch of the proposed rights issue. Losing the order would put a significant strain on its working capital position. Further, on 17 October 2024, the customer in question levied pre-judgment attachments on some of Ebusco’s bank accounts. Ebusco contends this and is making best efforts to lift the attachments as soon as possible”.

Concerning previous cancelled orders, Ebusco further announces that “after receiving a cancellation letter from Connect Bus and Keolis the company has reached an agreement of dissolution with both parties. As a large part of the Connect Bus order consisting of 47 buses, is already in an advanced stage of production, the company is currently in discussion with various parties to sell these already produced buses. As for the order placed by Keolis Sweden, both parties have settled on the agreement to cancel the order of 50 buses. The option for a minimum of 75 buses, as stated in the original contract, remains intact and has been further detailed in the terms and conditions, reinforcing this option between the two parties”.