Eco City Vehicles, the firm behind the Mercedes Vito London black cab, today saw its shares suspended as it stood on the verge of collapse just two years after rival TX4-designer Manganese Bronze did the same.
But now its future looks bleak after Eco City admitted its subsidiary One80, which owns the intellectual property to the crucial steering technology that adapts the Vitos to comply with London taxis’ strict turning circle rules, looks set to collapse into administration.
With no more Vitos at present being built after a lack of sales led to a pile-up of stock, Eco City admitted One80 cannot survive because of a “lack of production revenues” as well as an impending legal case against its 76.6% subsidiary by one of its licence holders.
“The group continues to experience challenging trading conditions requiring Eco City Vehicles to seek additional funding,” the firm said.
It added it was in talks with a potential backer but warned those negotiations “may or may not lead to additional funds”.
That uncertainty saw Eco City suspend its shares — which have plummeted by more than 80% in 2014 — at 0.3p “pending further evaluation of its position and future structure”.
Eco City only has one person left on the firm’s executive team, finance director Jonathan Moritz, who did not return telephone calls today.
In August, Eco City blamed San Francisco cab-booking app, Uber, for slaying London’s iconic taxis trade. It said that its collapse in revenues — which were down by a third in the six months of July — were “mainly due to the emergence of Uber”. But the Vito is also facing challenges from new taxis from Metrocab, which is making an electric cab, and Nissan.
Eco City’s struggles follow Maganese Bronze’s collapse in 2012, just two months after the Spice Girls sang and danced on top of five of its cabs in the closing ceremony of the Olympic Games. The firm was later bought by China’s Geely, for £11 million, and restarted production.
19 September 2014
Eco City Vehicles PLC
("ECV" or "the Group")
Share Suspension and Trading Update
Eco City Vehicles PLC ("ECV"), the sole distributor of the licensed Mercedes Vito taxi, provides the following update regarding One80 Limited ("One80").
One80 is the Group's 76.6% subsidiary, which owns the intellectual property rights to the rear wheel steer technology and other design rights used on the Mercedes Vito taxi.
In September 2012 ECV acquired the benefit of a short term loan made to One80 by Cabvision Network Limited. This loan has now been repaid and the security over One80 assets has been satisfied.
As previously announced on 12 August production of Mercedes Vito taxis remains on hold owing to existing stock levels of completed vehicles.
With a lack of production revenues and, also previously announced the impending legal case against One80 by the non-exclusive licence holder the directors of One80 have notified its shareholders of its intention to appoint an administrator for One80.
As previously announced the Group continues to experience challenging trading conditions requiring ECV to seek additional funding. ECV is in negotiation with a potential funder that may or may not lead to additional funds.
With the potential administration of One80 and the resulting contractual frustrations encountered with third parties in executing disposals under the Group's strategic review, together with the continuing challenging trading conditions there is uncertainty as to the Group's financial position and prospects, as a consequence, ECV has requested a suspension of its shares pending further evaluation of its position and future structure.
Eco City Vehicles plc
John Swingewood, Chairman
Jonathan Moritz, Finance Director
Numis Securities Limited
Stuart Skinner (Nominated Adviser)
David Poutney (Corporate Broker)
Neil Thapar, Sam MacAuslan