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Ecotality Exploring Restructuring or Sale, Cites List of Challenges

Ecotality Inc. (ECTY) said it is exploring strategic options, including a restructuring or sale, after citing a range of problems, including payment suspensions from the U.S. Department of Energy.

The electric transportation company has hired FTI Consulting Inc. (FCN) to help with its review. The company provides clean electric transportation and storage technology services that are used in on-road and grid-connected vehicles, material handling and airport electric ground support applications. The firm also makes specialty solar products and advanced battery systems.

Shares plunged 79% to 31 cents in recent trading after hitting several single-stock circuit breakers. The stock has dropped 42% in the past 12 months.

Ecotality pointed to its failure to attain sufficient sales volumes of its commercial Electric Vehicle Service Equipment in order to support its operations in the second half of the year.

It also said it was unable to release a scheduled new product offering in its Minit Charger industrial line, which is “critical” to its growth. Ecotality said the Minit Charger 12 product exhibited unacceptable performance shortfalls during prototype verification testing, and hence won’t be introduced in 2013.

Ecotality also said it has been unable to obtain additional financing, and it has been notified by the Department of Energy that the agency is suspending payments to the company in connection with the EV Project–which Ecotality described as being “the largest deployment of electric vehicle charge infrastructure in history.”

The suspension comes after Ecotality notified the DOE on Thursday that if it can’t get additional financing, it may not be able to fulfill its operational obligations, including under the EV Project.
more wsj.com

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