This brings Israel Corp.'s investment in the troubled electric car venture to $300 million, out of the $750 million raised in five years.
Israel Corporation (TASE: ILCO) has announced that it has injected an additional $33 million into electric car venture Better Place Inc., in view of the company's difficult financial and business condition. The capital brings the amount injected into Better Place in the current round to $66 million, after the first half of the money was injected a few months ago.
In November 2012, Better Place's shareholders promised to inject $100 million into the company, due to its cash flow needs and dwindling reserves. Israel Corp. pledged $66 million of the total in two tranches.
The injection brings Israel Corp.'s investment in Better Place to $300 million, invested in four financing rounds since the venture was founded. Israel Corp. controlling shareholder Idan Ofer made a personal investment of $19 million in Better Place in the current round, on top of the $65 million he has already invested.
Better Place has raised $750 million in five years altogether.
Better Place needs the capital because its cash burn rate has been higher than expected. Israel Corp. said in its last financial report that Better Place's deficit reached $562 million, and that the venture would continue to lose money and have negative cash flow in the coming periods.
With disappointing business performance, Better Place has undergone severe shocks in recent months, beginning with the ouster of founder and CEO Shai Agassi, and ending, so far, with the resignation of his successor, Evan Thornley. The company has fired hundreds of employees as part of its streamlining and cost-cutting plan, and closed its operations in the US and Australia.
Published by Globes [online], Israel business news - www.globes-online.com - on February 27, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
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