Electrification of heavy vehicles | The coffers were emptying too quickly at Effenco

Effenco was unable to replenish its coffers despite international breakthroughs and its contracts obtained from renowned clients. Unable to attract a new investor, the young Quebec shoot, which seemed to be on the rise, had no choice: bankruptcy was inevitable.

Julien Arsenault
The Press

This is how David Arsenault, founder and ex-president of the specialist in the electrification of heavy vehicles, summed up the debacle of the company founded in 2006, Friday, during a meeting of creditors. Nearly $16 million in public funds are at stake.

It was the first time that it was possible to hear Mr. Arsenault’s version of events since the company went bankrupt last month. Before venting the end of the company’s activities, The Press had tried many times to speak with Mr. Arsenault, without success.

Effenco offered a hybrid-electric solution intended for heavy vocational trucks, such as those intended for the collection of garbage or recyclable materials. The technology allows the engine to be shut off when the vehicle is stopped 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. The company was also counting on a 100% electric solution, which required investments.

Last fall, Effenco strengthened its ties with the French waste removal giant in order to convert 60 of its heavy trucks. It had 37 employees at the time of turning to the Bankruptcy and Insolvency Law.

in debt

At the time of filing for bankruptcy, Effenco’s receivables amounted to 17.5 million. The two main creditors are Investissement Québec (IQ), the financial arm of the Québec state, and BDC Capital, which is part of the Business Development Bank of Canada – a federal Crown corporation. The two organizations were also the two largest shareholders.

According to Mr. Arsenault, IQ and BDC Capital also refused to grant interim financing to his business as his situation deteriorated. However, he did not give further details. Impossible, therefore, to know why no other investor was interested.

“We needed an additional cash injection,” he said. It could only be provided by the existing shareholders and they decided not to. The board of directors therefore opted for bankruptcy. »

According to our information, the delays surrounding the renewal of the Écocamionnage program, which subsidizes companies adopting green technologies, have also contributed to weakening Effenco. Expiring on March 31, 2021, the measure was renewed last December. The uncertainty would have prompted several potential customers to remain on the sidelines, which would have harmed Effenco.

Millions at risk

Over time, Quebec has paid around $10.5 million to Effenco through financing rounds and loans. The company also owes 5.5 million to BDC Capital.

Secured creditors are unlikely to be able to recover all of the monies invested. According to the report presented Friday by MNP, the trustee in the file, the value of the assets of the company was estimated at 6.6 million. A liquidation process is underway in the hope of finding buyers for the patents, stocks and equipment. Bids must be submitted by May 27.

“There is interest, but there are no offers yet”, indicated to The Press trustee Pierre Marchand.

IQ did not want to come forward on the amount that could be written off. In an email, its spokeswoman, Isabelle Fontaine, said that “it will be necessary to wait for the sale of the assets […] to find out how much Investissement Québec will be able to recover”.