Israel Corp. mulling closure of Better Place

The future of the electric car venture will depend upon its ability to continue raising cash.

Is the end nigh for Better Place? Within the next few days, a meeting will take place at Israel Corporation (TASE: ILCO), Better Place's main investor, on the electric car venture's future, and whether or not it will continue will depend upon its ability to continue raising cash. In that regard, Idan Ofer, who controls Israel Corp., recently approached potential investors.

Better Place said in response to the report, "In the past few months Better Place has continued its many efforts to maintain its activity. No other decision has yet been reached on the matter."

Market sources estimated recently that Better Place would need at least another four years, and investment of another $500 million, to reach operating breakeven. This estimate is based upon annual investment of some $120 million in the venture, which recently underwent a streamlining program including layoffs and shutting down of activities. As far as is known, it has enough cash to last until August 2013, and it seeks creative solutions for raising capital. Sources inform "Globes" that it has again examined the possibility of raising equity from Israeli institutions.

From its founding in 2007 up until the end of 2012, Better Place ran up a loss of $812 million.

Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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