£250m debt from bankrupt EV leasing company
【Summary】Electric car subscription service Onto, which recently collapsed into administration, owed £250m. The company's investors declined to provide additional funding, leading to its downfall. Attempts to find a buyer were unsuccessful. The fleet of electric vehicles in Onto's possession shrank by one-third, and at the time of collapse, it had 3,840 cars with subscribers. Administrators have been trading the business while searching for a buyer or assets, receiving 15 indicative offers so far.
Onto, the fast-growing electric car subscription service, owed £250m when it went into administration in September. The company had received £340m in investments over six years, but when its investors refused to provide additional funding, the company's problems escalated. Efforts to find a buyer for the company were also unsuccessful. At its peak in 2022, Onto had more than 7,000 electric vehicles in its fleet, but this number had decreased by one-third by the time the company collapsed. At the time of the collapse, Onto had 3,840 cars with customers paying a subscription.
Onto was founded in 2016 by Rob Jolly and Dannan O'Meachair and was recognized as the fourth fastest-growing UK tech business in Deloitte's Fast 50 list last year. The company's annual revenues had reached £34m. Administrators Gavin Maher, Johnathan Lees, and Ian Wormleighton from Teneo were appointed to oversee Onto Holdings and its four related companies on September 11. Following the collapse, 61 out of 139 employees were made redundant.
The administrators have been actively trading the business while searching for a buyer or potential buyers for the business or its assets. By the end of October, they had received 15 indicative offers, which they were in the process of evaluating. One of the challenges faced by Onto was the decline in the value of its fleet. The fleet's value had dropped from £169m in November 2022 to £97m in July, as the residual values of electric vehicles did not meet expectations. This decrease in value resulted in the fleet's value falling significantly below the £135m that the company still owed on the vehicles.
During the period between April and June of this year, Legal & General and other investors injected £31m into Onto. However, when the company needed additional cash to avoid breaching its loan covenants, these investors declined to provide further funding. According to the administrator's report, secured creditors, including Lombard, Intertrust Trustees, Alter Domus Trustees, and HEF, are owed £82.4m, which is expected to be repaid in full. Unsecured creditors, on the other hand, are owed £164.5m, but this amount could potentially increase as more claims are made.
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