Troubled hydrogen fuel cell vehicle company, Hyzon Motor, which just a week ago shut down its Australian and European operation and reported some serious financial straits, says it is now set to mount a fresh equity sae in a bid to bolster its working capital.
Like the hydrogen fuel cells it is aiming to develop, produce and sell, Hyzon has not produced many emissions, in the form of actual trucks to sell, despite chewing through vast piles of cash provided by its investors
The Hyzon announcement is the latest move in the hydrogen fuel cell-powered truck maker’s vital ongoing restructure.
The Illinois-based Hyzon says it hopes to sell 22.5 million shares to raise around $AUD6.5 million ($US4.5 million) before paying agent fees and other expenses. The company said the sale was only open for a few days and was set to close tomorrow US time (22 July).
Hyzon hired investment house PJT Partners in late June, to carry out an operational review, to raise funds and explore the sale of all or part of its assets as it sought to cut costs and slow its cash drain and warned layoffs were possible.
PJT’s first conclusions from the review emerged in early July, with Hyzon announcing on the 8th July that it would shutter its operations in the Netherlands and Australia.
The Company blamed waning government support for fuel cell-powered transportation in Europe and Australia as a contributing factor to the decision. as part of that announcement, Hyzon said it was set to incur charges of about $AUD25.5 million ($US17 million) , of which around $AUD10.5 million ($US7 million) in cash due to the retreat from Europe and Australia.
“This was a complex and difficult decision,” CEO Parker Meeks said.
“Given the challenges of bringing new technology to market in an emerging industry, we believe we need to focus our efforts on the North American market and refuse industry as well as overseeing our large fleet trial programs, which commence this summer.”
Hyzon is still looking to sell its European and Australia/New Zealand businesses as well as part of or all of the company, such is its financial state.
The company had hinted at the fate for the Aussie and Euro units in late June, when it revealed a strategic realignment to its core North American markets.
However, on 8th July, the troubled company warned that if sufficient financial backing is not found or another strategic alternative cannot be secured, then bankruptcy protection through the courts may become necessary.
How much funding is required and how long the $AUD6.5 million will last is at this stage unclear.
To illustrate its financial woes, Hyzon posted a loss of $AUD51.3million ($US34.2 million) in the first quarter of 2024, compared with a $AUD45.5 million ($US30.3 million) loss in the same period in 2023.
As of 31 March, Hyzon reported it had almost $AUD79 million ($US52.4 million) in cash and cash equivalents on hand, less than half the $AUD168 million ($US112.3 million) it had available at the end of 2023.
Hyzon indicated that a proportion of the funds being raised will be spent on readying for the start of production of its fuel systems, which the company said two months ago, remained on track for the second half of 2024. The company said it has completed production of five 200-kW C-sample fuel cell systems iduring the first quarter this year along with five more in April.
Hyzon says it still expects to carry out large-fleet trials of its systems in the U.S. and Canada across the Northern summer, but the company has yet to publicly schedule the release of its second-quarter 2024 earnings.
