Tue, 12 Sep 2023 | ADMINISTRATION
Warwick-based electric car subscription firm Onto has fallen into administration after being hit by a range of factors, most notably the falling prices of electric vehicles (EVs) during the first half of 2023, with the company’s borrowing secured against its fleet.
Following a £47 million funding round in 2022, the business attracted a significant amount of investment, including around £22.5 million from Legal & General in recent months. However, in July 2023, L&G said that it would not be providing the business with further cash, leading to reports that it was facing administration.
As a result, restructuring firm AlixPartners were engaged to draw up contingency plans for the company potentially entering administration. Subsequently, it was announced this week that Gavin Maher and Jonathan Lees of Teneo Financial Advisory have been appointed as joint administrators of Onto Holdings Ltd. Maher and Iam Wormleighton have also been appointed administrators of certain Onto Holdings Ltd. subsidiaries.
The administrators have said they will seek to maintain Onto’s operations with minimal disruption to customers while they assess the strategic options available to the business.
Joint administrator Gavin Maher said in a statement: “Onto has suffered from the steep fall in electric vehicle residual value in the first half of 2023, rising interest rates and the squeeze on disposable income and was unable to secure additional funding from its shareholders.”
‘After entering administration, Onto will continue to serve existing customers as the administrators explore strategic options.’
Onto was founded in 2017 and provided EVs to customers on a monthly subscription basis. By the start of 2023, it had grown to have a fleet of over 7,000 EVs and was reported to have introduced over 20,000 people to electric cars through subscriptions.
In the firm’s most recent accounts, for the year ending December 31 2021, it reported turnover of £12.6 million and gross profits of £2.6 million. Despite this, it reported pre-tax losses of £16.6 million. At the time, the company’s net assets amounted to £11.2 million, with creditors owed close to £123 million.
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