Proterra Inc filed for Chapter 11 bankruptcy on Aug. 7 in the District of Delaware. The company says the move is an “effort to strengthen its financial position through a recapitalization or going-concern sale.”
The company operates three business lines, including Proterra Energy, which provides charging solutions, Proterra Powered, which provides battery systems, and Proterra Transit, which provides zero-emission transit buses. The company says its filing will maximize the value of each of its product lines.
“Proterra is at the forefront of the innovations that are driving commercial vehicle electrification. We know we’re building industry-leading products that our customers want and need,” said Gareth Joyce, Proterra CEO. “The foundation we have built has set the stage for decarbonization across the commercial vehicle industry as a whole, and we recognize the great potential in all of our product offerings to enable this important transformation. This is why we are taking action to separate each product line through the Chapter 11 reorganization process to maximize their independent potential.”
In January 2023, the company said it would cut 300 jobs and move the manufacture of its battery and bus manufacturing to its South Carolina facility as a cost savings move. Proterra’s 2023 Q1 earnings report shows the company was in compliance with its debt covenants and had $296 million in cash available. However, the report cautioned the company would be exploring options to raise capital to avoid potential risk of not meeting its future financial obligations that were to become due within the next year.
The company cancelled its scheduled 2023 Q2 earnings call that was scheduled for Aug. 9, 2023. A Bloomberg report said the company listed liabilities and assets of $500 million each in its filing.
In a statement following the Chapter 11 filing, Proterra said it intends to “operate in the ordinary course of business” as the bankruptcy process plays out.
“While our best-in-class EV and battery technologies have set an industry standard, we have faced various market and macroeconomic headwinds that have impacted our ability to efficiently scale our opportunities simultaneously. As commercial vehicles accelerate towards electrification, we look forward to sharpening our focus as a leading EV battery technology supplier for the benefit of our many stakeholders,” added Joyce.
Moelis & Company LLC is acting as Proterra’s investment banker, FTI Consulting as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor.