CODA Enters Chapter 11 to End EV Efforts and Restructure around Energy Storage
CODA Holdings, Inc. is focusing its business strategy on the growing energy storage market and abandoning its efforts to enter the market for electric vehicles. CODA plans to implement the restructuring of its business through a voluntary filing under Chapter 11 of the U.S. Bankruptcy Code. The voluntary petition was filed in the District of Delaware. This process is intended to enable the company to complete a sale, confirm a plan and emerge from bankruptcy in a stronger position to execute its new business plan. The company expects the sale process to take 45 days to complete.
CODA diversified its business and formed CODA Energy two years ago. CODA Energyâ€™s products are based on the same core technology, which includes its proprietary battery management and thermal management systems, found in CODAâ€™s vehicles adapted for stationary energy storage applications. The Company designs and builds scalable, custom energy storage solutions optimized for generation, distribution and behind-the-meter applications for commercial, residential and industrial end users. The company is currently shipping product, and has a robust pipeline of new customers and existing installations in the field.
FCO MA CODA Holdings LLC, an affiliate of Fortress Investment Group, is leading a consortium of lenders intending to provide debtor-in-possession (DIP) financing to enable the companyâ€™s energy storage business to remain fully operational during the restructuring process. CODA has filed a motion with the bankruptcy court for approval of the consortium, or its designee, as the stalking horse bidder in the sale process to acquire the company post-bankruptcy. In addition, CODA will seek to monetize value of its existing automotive business assets.
"After concluding a comprehensive review of our strategic options, the Board of Directors, management team and senior lending group have concluded that focusing on the Companyâ€™s energy storage business presents the best opportunity moving forward,â€ said Phil Murtaugh, Chief Executive Officer, CODA Holdings, Inc. â€œWe believe the restructuring process that we have entered into today will enable the Company to complete a sale and confirm a Plan that maximizes the value of its assets, serving the best interests of our stakeholders.â€