Truck Maker Hyzon Raises Funds for Working Capital
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Hyzon Motors is set to bolster its working capital through an equity sale, the latest move in the hydrogen fuel cell-powered truck maker’s ongoing restructuring, it said July 19.
Bolingbrook, Ill.-based Hyzon expects to sell 22.5 million shares and raise $4.5 million before paying placement agent fees and other expenses. The sale is expected to close July 22, it said. Roth Capital Partners was the placement agent.
In late June, Hyzon hired investment house PJT Partners to carry out an operational review, raise funds and explore the sale of all or part of its assets as it sought to cut costs and slow its cash drain. Hyzon warned layoffs were possible.
PJT’s first conclusions from the review emerged in early July, with Hyzon announcing July 8 the shuttering of operations in the Netherlands and Australia. Hyzon said waning government support for fuel cell-powered transportation in Europe and Australia contributed to its decision. The company did not say how many staff were affected as a result, and a company representative was not immediately available for comment on the number of job losses.
Hyzon is set to incur charges of about $17 million, of which around $7 million is expected to be in cash, due to its retreat from Europe and Australia.
Meeks
“This was a complex and difficult decision,” CEO Parker Meeks said. “Given the challenges of bringing new technology to market in an emerging industry, we believe we need to focus our efforts on the North American market and refuse industry as well as overseeing our large fleet trial programs, which commence this summer.”
Hyzon is still looking to sell its European and Australia/New Zealand businesses as well as part of or all of the company.
The company had tipped its hand on the prospects for the units in late June by revealing a strategic realignment to its core North American markets. However, the company warned July 8 that if sufficient financial backing is not found or another strategic alternative cannot be secured, then bankruptcy protection through the courts may enter the picture.
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How much funding is required and how long the $4.5 million will last is unclear. Hyzon posted a loss of $34.2 million in the first quarter of 2024, compared with a $30.3 million loss in the year-ago period, it said May 13. As of March 31, Hyzon had $52.4 million in cash and cash equivalents on hand, less than half the $112.3 million available at the end of 2023.
A proportion of the funds being raised will be spent on readying for the start of production of Hyzon’s fuel systems, which in May the company said remained on track for the second half of 2024. The company completed production of five 200-kW C-sample fuel cell systems in Q1 and five more in April.
Hyzon expects to carry out large-fleet trials of its systems in the U.S. and Canada this summer.
The company has yet to publicly schedule the release of its second-quarter 2024 earnings.
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