Azure Dynamics, which develops electric-drive powertrains for automakers such as Ford, said this week that it will file for financial protection from its creditors under Canadian law and will cancel its plans to sell shares in what may be a precursor to a bankruptcy filing.

Azure is the company that adds the all-electric powertrain to Ford's practical little Transit Connect Electric. For now, no new TCEs will be made. Azure's Mike Elwood told AutoblogGreen that production of the Transit Connect Electric has stopped as a result of the restructuring and that, "While we go through our restructuring there will be no TCE activity until we present an approved plan." We're told that warranty issues for those who have already purchased a Transit Connect Electric will be a part of this plan.

Ford's Wes Sherwood told AutoblogGreen that Azure's filing does not affect Ford's overall EV and green-vehicle strategy. "Our priority is to ensure that Azure's Transit Connect Electric customers continue to have support throughout their ownership experience," he said. "Our Ford electric vehicle product plans remain on track, as part of our commitment to provide customers the power of choice for fuel economy solutions across our lineup – from EcoBoost-powered vehicles and hybrids to plug-in hybrids and full electrics."

Azure Dynamics joins a list of companies that were looking to capitalize on an increase in demand for battery-electric and plug-in hybrid-electric vehicles but have had problems staying afloat. Extended-range plug-in utility vehicle maker Bright Automotive folded last month amid its claims that the federal government took too long to process the $400 million in loans promised to the company, while Fisker Automotive, which makes the extended-range plug-in Karma, has faced questions about its own future and most of the federal government loans earmarked for the company have been delayed.
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Azure Dynamics Announces Commencement of CCAA Proceedings Previously Announced Offering of Units to be Abandoned

Burnaby, BC – March 26, 2012 – – Azure Dynamics Corporation (the "Company" or "Azure") (TSX: AZD)(OTC: AZDDD), a world leader in the development and production of hybrid electric, and electric components and powertrain systems for commercial vehicles, today announced that the Board of Directors of the Company has authorized the filing of a Petition in the Supreme Court of British Columbia for an Initial Order under the Companies' Creditors Arrangement Act (the "CCAA"). The Company expects that the Initial Order will provide for a stay of proceedings while the Company and its subsidiaries pursue restructuring alternatives under CCAA protection. The Board of Directors of the Company has also authorized the filing of a voluntary petition under Chapter 15 of title 11 of the United States Bankruptcy Code to seek recognition and enforcement in the United States of the Initial Order requested in the CCAA proceedings.

In connection with commencing CCAA proceedings, the Company also announced that it will be abandoning its previously announced offering of units (the "Offering").

"The decision to abandon the Offering and commence CCAA proceedings comes after several weeks of formal and informal communications with Staff of the Ontario Securities Commission", said Scott Harrison, CEO of Azure. "Despite including detailed risk factor and other disclosure in the preliminary prospectus regarding the Company's liquidity and financial hardship, and after several weeks of attempting to satisfy the demands of Staff for additional information and disclosure, the Company was informed on March 23, 2012 that Staff's recommendation, based on the current draft of the prospectus, would be that a receipt not be issued for the prospectus on the basis that it would not be in the public interest to do so."

In light of the fact that the Company's current liquidity position leaves it without sufficient time or cash resources to pursue its right to be heard before the Director and, if necessary, to appeal any decision of the Director following such hearing to a panel of commissioners of the OSC, the Board of Directors has determined that the Company's best remaining alternative is to pursue a restructuring under the protection of CCAA.

"The Board of Directors strongly disagrees with any suggestion that it would not be in the public interest to issue a receipt for the prospectus for the Offering", said Cam Deacon, Chair of the Board of Directors of Azure. "In our view, any determination of what is in the public interest should weigh all relevant interests, including the interest of the Company in being able to access the capital markets and the interests of the Company's existing shareholders, employees, suppliers, customers and other stakeholders. Potential investors had the benefit of very detailed risk factor and other disclosure regarding the Company's liquidity and financial hardship, and the Company was prepared to include in the prospectus virtually all additional disclosure demanded by OSC Staff, except where it was not possible for the Company to include the demanded disclosure. In the circumstances, we are deeply troubled by the notion that investor protection would require allowing such unfortunate consequences to be visited upon a world industry leading company and its existing shareholders, employees, suppliers, customers and other stakeholders, particularly given our understanding that investors themselves, having had the benefit of such detailed disclosure, continued to have significant interest in the Offering. We wish to convey to the Company's stakeholders both our terrible sadness at this outcome and our commitment to pursuing the best outcome remaining available in the circumstances through CCAA proceedings."

About Azure Dynamics
Azure Dynamics Corporation (TSX: AZD)(OTC: AZDDD) is a world leader in the development and production of hybrid electric and electric components and powertrain systems for light and medium duty commercial vehicles. Azure is strategically targeting the commercial delivery vehicle and shuttle bus markets and is currently working internationally with a variety of partners and customers. The Company is committed to providing customers and partners with innovative, cost-efficient, and environmentally-friendly energy management solutions. For more information please visit www.azuredynamics.com.

The TSX does not accept responsibility for the adequacy or accuracy of this release.

# # #

Forward-looking Statements

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the expected provisions of an Initial Order under the CCAA. The forward-looking statements are based on certain key expectations and assumptions made by Azure, including expectations and assumptions concerning approval by the Supreme Court of British Columbia of the Company's petition for an Initial Order under the CCAA. Although Azure believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Azure can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Risks relating to Azure are set out in more detail in Azure's annual information form which can be accessed at www.sedar.com. The forward-looking statements contained in this press release are made as of the date hereof and Azure undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.


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    • 1 Second Ago
  • 22 Comments
      Car Guy
      • 2 Years Ago
      Any business model predicated on requiring government money to operate is doomed to fail. Just ask Think, Bright, Azure, and soon Fisker.
        That Kid
        • 2 Years Ago
        @Car Guy
        It also doesn't help when you're developing a new technology that's expensive and time-consuming to engineer to a good standard. Particularly when you're an up-start that doesn't have the considerable cash reserves or a full line-up of existing products. Allowing advancements like these to wither on the vine simply because today they are too expensive or not quite as good as existing alternatives is downright foolish. If that had been the attitude Americans have always taken then our automotive industry probably would have never formed to begin with. Not to mention that killing alternative energy tech in its infancy benefits the oil companies and the established automakers but just about nobody else...
      That Kid
      • 2 Years Ago
      Unbelievable that so many of the readers of this blog are willfully ignoring the obvious facts in an attempt to score political points against subsidies for clean energy technology. What makes it worse is that many of the same people will try to argue the case for billions of dollars in subsidies to oil companies which already have net incomes in the tens of billions! Even when the automotive industry was just forming many of its pioneers had an exceptionally difficult time getting off the ground: Ford Motor Company was the 3rd company Henry Ford founded and even then he might have floundered if his friend and initial financier did not have the president of the German-American Savings Bank as his uncle! Ransom Olds had to walk away from Oldsmobile because it was in dire straits. Many of the industry's greatest pioneers and engineering minds struck out at least once. And here we are supposed to believe that because of the failure of a few EV and renewable energy upstarts that these technologies are inherently and forever unfeasible? That the government spending money to promote their advancement is a bigger waste than 90% of the other unconscionable crap that Congress appropriates money for? Honestly, it is truly dismaying that the idiot talk radio agitators have managed to con ordinary people into thinking that despising electric vehicles and praying for their demise is a political principal. And anyone who wants to give me a thumbs down without approaching the argument head on is a coward.
      Toneron
      • 2 Years Ago
      Business plan reliant on Government handouts = FAIL amazingly similar Life plan reliant on Government handouts = FAIL Liberalism is a mental disorder.
        Matt
        • 2 Years Ago
        @Toneron
        Get the hell off of an enthusiasts blog with your political crap. Your not going to impact anyone with that kind of talk here other than piss people off. Not at the system...at you
          Car Guy
          • 2 Years Ago
          @Matt
          @Matt - There are plenty of political jabs made by the writers at Autoblog (and especially Autoblog green). So political comments are relevant as article writers here set the tone for comments.
          mrx19
          • 2 Years Ago
          @Matt
          Chill out Matt. We know it tough having to deal with reality.
          Matt
          • 2 Years Ago
          @Matt
          You dont even know my political leanings. I deal with this reality every day in the work i am in. I'm not saying these discussions shouldn't be had, absolutely should, arguably the most important conversation. But this is not the proper forum and while tangently related, is still off topic from what the conversation on an AUTO ENTHUSIASTS blog should be.
        leong
        • 2 Years Ago
        @Toneron
        only if you are not a bank.
        Car Guy
        • 2 Years Ago
        @Toneron
        Toneron is on point, however, a bit too harsh in his assessment of liberalism. I look at evidence, not rhetoric. And the evidence says both political parties don't have a clue how to balance the budget and special interests has rotted the system to the core.
          That Kid
          • 2 Years Ago
          @Car Guy
          This is absolutely true but I don't believe this is a reflection on either actual leftism or the kind of sensible conservatism represented by people like Dwight Eisenhower. Both parties are woefully beholden to corporate interests and incapable of offering anything but the same economic policies that have been failing us since the late 70's. Without making a clean break from the current system, we can only expect more of the same- and worse.
      Danaon
      • 2 Years Ago
      I'm starting to wonder if ANY company the government loaned money to will survive. Maybe they should have taken the hint that these companies couldn't get all the funding they needed from private investors. If private investors aren't willing to put their money on the line they generally have a good reason.
        That Kid
        • 2 Years Ago
        @Danaon
        Private investors are often incapable of thinking past the short term desire to make a quick buck. They also have, by and large, grown more fond of trying to strike it rich in the high-stakes casino that is our financial sector than investing in any part of the productive economy. Of course the only thing the lunatic free market geniuses in Congress can think to solve this problem is a "JOBS Act" which strips investor protections and would only make it more likely for smaller, less well-connected investors to lose their shirt! The abject stupidity abounds!
      GasMan
      • 2 Years Ago
      You mean the market for delivery vans with a 40 mile range is limited? Who would have known?
      johnb
      • 2 Years Ago
      No amount of hope and change could save it. RIP Azure. Maybe in a few years/decades when this economy turns around and you move production to China things will work out for you.
      nomadsto
      • 2 Years Ago
      this company failure just boggles the mind, considering how easy it is to start up a brand new company using cutting edge state of the art technology. those hippies must've spent all the money smoking doobies in the back room. all of you neo-cons are probably right, things were much better when only white male landowners could vote.
        Danaon
        • 2 Years Ago
        @nomadsto
        Wow, you really showed that straw man who's boss.
          nomadsto
          • 2 Years Ago
          @Danaon
          Fair enough, but that "straw man" drew first blood.
        johnb
        • 2 Years Ago
        @nomadsto
        Nomad, actually it is incredibly easy to start a company when you can con a politically motivated left leaning govt to spend other people's money on it.
          nomadsto
          • 2 Years Ago
          @johnb
          Really John, not just easy but incredibly easy? To start a car company? By conning the US government? Ok if you say so. The 2 points I was trying to make (however heavy handedly) were - A. The car bussiness is 100 times more complex and difficult to succeed in than we as enthusisist like to imagine it is. And B. liberal and progessive ideals have done way more good than harm in this world. I mean would any of us like to give back or right to vote just because we are a woman, a minority, or a renter?
      Homar Torres
      • 2 Years Ago
      what should be the resale price for a transit connect electric now that they stop the program and go for Bankruptcy?
      1guyin10
      • 2 Years Ago
      Just goes to prove - its not as easy as it looks!
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