Tritium charged down as administrators called in

Tritium charged down as administrators called in

Five months after attempting to turn its fortunes through jobs cuts and an Australian factory closure, Brisbane-headquartered electric vehicle (EV) fast-charger company Tritium (NASDAQ: DCFC) has today announced the appointment of voluntary administrators (VAs).

The former unicorn, which has recently been under scrutiny by the NASDAQ market operator for falling short of market standards on price and volume, has appointed KPMG Australia’s Peter Gothard, James Dampney and Will Colwell as VAs for the NASDAQ-listed company and its Australian subsidiaries.

Founded in 2001, Tritium designs and manufactures proprietary hardware and software to create advanced and reliable DC fast chargers for electric vehicles.

Following the appointment, the secured lenders of Tritium today appointed Shaun Fraser, Kathy Sozou, Matthew Hutton and Jamie Harris of McGrath Nicol as receivers and managers.

As a result of this appointment the assets and operations of the companies will be managed by the receivers.

"As administrators, our initial focus will be working with the receivers to secure the assets and stabilise the business operations of Tritium to maximise the outcome for all concerned parties," says KPMG Australia’s restructuring services partner Peter Gothard.

Tritium's business and assets up for sale pre-administration

In a statement, McGrathNicol emphasises Tritium is well-positioned to capitalise on the global demand for direct current fast chargers.

"Our immediate focus is to stabilise operations and work closely with Tritium’s employees, customers and suppliers as we attempt to secure the best possible outcome for all parties," adds McGrathNicol partner and receiver, Shaun Fraser.

"A sale process for Tritium’s business and assets was underway prior to our appointment - we will be re-engaging as a matter of urgency with interested parties and the broader market to seek to find a long-term capital and/or ownership solution for Tritium," Fraser says.

Tritium's origins date back to the development of a lightweight motor control technology for a solar racing team competing in outback Australia from its founders Dr David Finn, Paul Sernia and James Kennedy, with the company starting out as an engineering consulting firm with a range of specialties from hydroelectric power stations to storage systems for green buildings.

But in 2012 the trio was asked to create a robust, weatherproof DC (direct current) fast charger for electric vehicles, leading to the development of its breakthrough liquid-cooled, weather-sealed 50kW RT50 DC fast charger - the most compact to date at the time.

The technology continued to evolve and Tritium adopted a more global outlook, opening its first international office in California in 2017 and releasing its new modular line of fast chargers in 2020.

Charging onto the global stage

With the support of cornerstone investor Trevor St Baker, among others, a state-of-the-art testing facility was launched the following year at its Brisbane headquarters, featuring one of the highest-power commercially accessible EMC (electro-magnetic compatibility) testing chambers in the world that are designed to deliver up to 720kW of regenerative power from its integrated system with fully integrated AC and DC power feeds. 

2022 was a milestone year for Tritium as it was listed on Wall Street and its CEO Jane Hunter took part in a press conference with US President Joe Biden to highlight the expected economic impact of a new Tritium facility in Tennessee that would lead to a nationwide roll-out of chargers.

However, its financial results have fallen well short of forecasts amidst difficulties in the supply chain and with the maintenance of the chargers themselves, which have been canned by electric vehicle users at home in Australia.

Following the closure last year of its factory in Brisbane, where it still has a high-tech testing facility, the group's manufacturing is now limited to the US state of Tennessee where it still has one of the largest fast charger production sites of its kind globally.

The group also has sales offices in the UK, and services clients throughout the USA, Europe and the Asia Pacific region. On its website, the company says it has sold 13,000 chargers around the world to more than 47 countries, with the chargers demonstrating the ability to function in conditions ranging from -35°C to 50°C. 

As recently as November, the group announced it had completed the installation and operationalization of 33 of its 175kW chargers at the SSA Terminals container terminal at Pier C in the Port of Long Beach in California, representing the first large-scale port EV charging program in North America using mechanised charging connectors.

Across the Atlantic, Tritium announced it would be supplying the largest EV charging site in the country of Wales, comprising a new hub of 40 charging points – including five rapid Tritium 75kW DC chargers with 10 connectors – at the National Library of Wales.

Attempts to stay afloat

Tritium reported inventory assets of US$140 million at the end of 30 June 2023, but its share price is now sitting at just $3 - itself an amplification of a previous level that was lifted by a 200-to-one reverse stock split in a bid to keep regulators happy. This followed a delisting threat as its share price had slumped to just US$0.06 per share - well short of the $1 minimum required by NASDAQ.

In its latest filing with the US Securities and Investments Corporation, the group reported that the boards of Tritium and three subsidiaries - Tritium Pty Ltd, Tritium Holdings Pty Ltd and Tritium Nominee Pty Ltd - determined that these companies were insolvent or likely to become insolvent.

The filing, signed by Tritium CEO Jane Hunter, affirmed Tritium's other subsidiaries will continue to operate outside the voluntary administration.

Whilst it was fighting for its continued position on the bourse in the United States, the company entered into an amended loan note subscription agreement to make way for a new US$11.5 million facility, backed by several international affiliates as guarantors.

The St Baker Family Trust, which owns close to a quarter of Tritium, is one of the lenders under the new Facility C via Sunset Power Pty Ltd as its trustee, alongside Cigna Health and Life Insurance Company, Barings Target Yield Infrastructure Debt Holdco 1 S.À R.L., and Martello Re Limited.

"The bridge loans are intended to strengthen the company’s liquidity and lend to the company’s ability to continue as a going concern as the company works to continue operations and serve its customers," Tritium stated in an SEC filing at the time.

As a possible sign of what may have gone wrong for the company, on the condition of anonymity a former ex-Tritium employees told that design flaws in the chargers were "ignored", staff were not being trained properly on the assembly line, and consumer feedback was neglected. 

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