Ebusco plans to raise up to EUR 36 million through a rights issue offering

Ebusco intends to raise up to EUR 36 million of new equity “through a rights issue as part of its turnaround plan, as mentioned in the H1 2024 results”. The right issue provides the opportunity for existing shareholders to buy a set number of new shares in the company.

Ebusco towards bankruptcy?

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 0.94 €, and witnessed a -87% decrease in the last 12 months. The loss compared to the time when the company went public (October 2021) is -96%, as Ebusco’s shares value at that time was around 23 euros.

In early September 2024, 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.

A few days ago, Swedish carrier Connect Bus has decided to switch electric bus supplier due to significant delivery delays from Ebusco.

Ebusco goes for a right issue to raise capital

Ebusco announced that “today convenes an extraordinary general meeting of shareholders (EGM), to be held on Thursday 24 October to seek approval of the rights issue and a corresponding share consolidation, as well as the appointment of Christian Schreyer as a member of the Management Board”.

The Dutch company explains that “existing shareholders will have the opportunity to buy additional ordinary shares, through exercising their rights, and maintain their ownership percentage in the company. The rights will be tradeable, so shareholders that do not wish to buy new shares will be able to sell their rights on the stock exchange”.

The rights issue is expected to take place in Q4 2024. Further details of the rights issue, including the exact timeline and specific terms and conditions, will be provided in a prospectus currently being prepared by Ebusco.

Ebusco will propose to consolidate 5 shares to 1. This means that 5 (five) ordinary shares will be consolidated into 1 (one) ordinary share.

The purpose of the proposed share consolidation is to increase the market value per ordinary share and to facilitate the rights issue. With the current share price, any change of only a few cents in the share price immediately translates to a significant percentage value change. Following the share consolidation, the resulting share price will be five times the previous share price and trading liquidity may improve as a result.