Bankruptcy of Effenco | Crumbs for Quebec, which loses millions

The bankruptcy of Effenco has left only crumbs for Quebec, which recovers $40,000 of the approximately $10.5 million granted to this former rising star in the electrification of heavy vehicles, whose assets now belong to an Ontario company. .

Investissement Québec (IQ) – the financial arm of the state – confirmed the information after seeing Martinrea International recover what was left of the Quebec company. IQ had supported Effenco to the tune of 6 million through capital injection and loans in addition to having offered approximately 4.5 million under other programs, such as Créativité Québec and the temporary concerted action program for businesses (PACTE), set up during the COVID-19 pandemic.

“The assets were sold through a legal and transparent bidding process, and the buyer’s offer was the best deal,” IQ spokesperson Dominik Boudreault Lapierre said in an email. . This offer was approved by the courts. »

Effenco offered a hybrid-electric solution intended for specialized heavy trucks, such as those dedicated to the collection of garbage or recyclable materials. This technology makes it possible to cut the engine when the vehicle stops while continuing to supply auxiliary systems, such as a hydraulic tipper. This process had convinced the multinational Derichebourg, in addition to charming the City of New York.

However, the young shoot was unable to replenish its coffers despite international breakthroughs. Effenco filed for bankruptcy in April 2022. A few weeks before the announcement, a report by The Press revealed that the company appeared to have gone out of business.

During a hearing with creditors in the spring of 2022, the founder and ex-president of the specialist in the electrification of heavy vehicles, David Arsenault, revealed that his company was unable to convince a new investor to come on board.

BDC Capital, part of the Business Development Bank of Canada, to which Effenco owed nearly $5.5 million, likely lost everything. However, the organization had not confirmed this information to The PressThursday, despite our request about it.

It was not possible to know, on Thursday, the price paid by Martinrea International.

“Sustainability and innovation”

The Vaughan, Ontario-based company, which specializes in manufacturing auto parts, says the technology developed by Effenco aligns with “Martinrea’s sustainability and innovation initiatives.”

“We have hired several members of Effenco and the company will continue its activities in Quebec and will be integrated into the other sites operated by Martinrea”, underlined a spokesperson, Deanna Lorincz.

It did not specify how many former Effenco employees had been recruited.

Martinrea International operates 58 locations in 10 countries, including Canada, the United States and Mexico. The shares of the Ontario company are traded on the Toronto Stock Exchange.