11:42 am, November 8, 2023
Administrators for electric car subscription service Onto say it owed more than £121m.
Teneo Financial Advisory Ltd was appointed as its administrators in September, after Onto failed to secure extra cash from investors.
The Warwick-based company had been struggling after being hit by the falling prices of EVs during the first half of the year, since its borrowings are secured against its fleet.
Documents newly filed with Companies House show that the amount owed to all its 144 creditors totalled £121,468,606.
However, ahead of the administration, the group was in a net liabilities position of £9.7m as of July 2023, comprising the net of the group’s assets, that is, including the vehicles owned and the amounts owed to creditors.
They include Tesla Motors in Manchester, which is owed £35,347, Michelin Tyres (£68,751), the AA (£16,669), Cars Kidderminster (£7,354), Cap HPI (£5,629) Halfords (£2,425) and Facebook, which is owed a whopping £241,967.
The total doesn’t include customers whose contracts are ongoing, said Teneo.
Employees with a preferential claim are owed £173,123 and those with an unsecured claim are owed £1,842,516 – a total of £2,015,639.
Onto, which has 4,716 BEVs according to the documents, is continuing to receive subscription income while a buyer is found and/or there is a sale of its assets.
Teneo said Onto was historically loss-making at an operational level and was also badly affected in the six months to April 2023 when the UK’s BEV market deteriorated, with residual values dropping ‘significantly’ because of an increase in supply, prices of new BEVs being cut and the cost-of-living crisis turning people off BEV purchases.
Onto Holdings’ secured creditors are unlikely to be repaid in full and there is a glimmer of hope for Onto Holding’s unsecured creditors, as Teneo says there may be enough funds to allow for a distribution to be made to them.
Four subsidiaries, known as special purpose vehicles (SPVs), were formed for Onto Tech to isolate financial risk.
However, it’s unlikely that unsecured creditors within the SPVs will have much joy, and it’s uncertain that secured creditors be repaid in full, although some £53m was paid to them in August 2023.
The consolidated turnover for the companies rose by circa 270% between the 2021 and 2022 financial years to £34.136m thanks to more BEVs being hired.
Turnover for the seven months to July 2023 reached £20.2m, which was 10% higher versus the same period in the 2022 financial year. However, Lbitda (losses before interest, taxes, depreciation and amortisation) for those seven months was some £840,000.
Some £4.7m of exceptional costs was also incurred, including via raising new funding plus legal fees for waivers and agreements with secured creditors.
The value of the BEVs also took a £21m hit because of the market downturn in BEV residual values.
Teneo said there had been 37 inquiries about Onto and it had contacted 21 parties. So far, it has received 15 offers, ranging from bids for all the companies’ business and assets to just certain parts of it.
It is also pursuing overdue amounts owed to Onto, while BEVs whose subscriptions haven’t been renewed have been sold.
Founded in 2017, Onto offered cars to customers on a monthly subscription.
It grew to have more than 7,000 EVs in its fleet by the start of 2023 and introduced more than 20,000 people to electric cars via a subscription.
At the time of entering into administration, Onto employed 139 staff, and Teneo made 61 of the positions redundant, which it said had been a ‘difficult decision’.
In August 2021, we put Onto’s service to the test for a special video report. You can watch the video below:
This article was originally published at 11.42am on November 8 and updated at 5.59pm with a revised figure for the total number of BEVs and further updated at 6.17pm to include the latest-known net liability figure
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