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SE loses out as Axeon sold to Ironshield

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Published Date: 21 April 2009
By Hamish Rutherford
City Correspondent
AXEON, one of Scotland's major clean energy companies, was sold to its largest shareholder in a "pre-pack" administration yesterday, after a buyer could not be found for the firm.
The sale of Axeon, which is developing batteries for electric vehicles, protects more than 500 staff employed by the Dundee-based company.

But investment by shareholders, including Scottish Enterprise (SE) will be wiped out. At the company's peak
in late 2007 SE's stake was worth more than £1.7 million.

The publicly-funded body's loss was revealed after Axeon was yesterday sold to AG Holdings, a group controlled by hedge fund Ironshield Capital Management.

The deal came hours after Ironshield, Axeon's principal lender and largest shareholder, called in administrators Grant Thornton.

The group's staff, including around 70 based in Dundee, will be transferred to the new company, joint administrator Malcolm Shierson said.

However, Shierson warned that for other shareholders the deal was likely "to crystallise in a 100 per cent loss" on their investment.

Shierson said: "The company was marketed on a discreet basis earlier this year, but no-one came forward to express any serious interest, and it has been sold to an Ironshield company.

"We're satisfied that this represents the best outcome for the remaining stakeholders, given the circumstances."

While Axeon has announced a string of deals to develop test battery packs for electric vehicles, the recession has been blamed for a slow commercial take up of the technology.

Its power tool battery business, based in Switzerland, has also been hit by a downturn in the construction industry.

In February the company confirmed that it was in breach of its banking covenants, but was seeking to extend a temporary waiver on these.

Asked about the negotiations late in February a spokeswoman told The Scotsman that Ironshield were "very supportive and we would have no expectations that those covenants would not be extended".

It is thought the debts to Ironshield were in excess of £8m, while the London-based hedge fund owned just under 15 per cent of Axeon's shares.

Ironshield did not respond to requests for an interview yesterday, but said in a statement that it had bought Axeon's businesses "as we believe they have a promising and exciting future"

It added: "We have an ambitious development plan for the business as a whole and the acquisition allows us to provide the business with the necessary financial resources."

Scottish Enterprise owned 3.9 per cent of Axeon's shares, worth around £200,000 when its shares were suspended yesterday.

A spokeswoman for Scottish Enterprise said she could not find out how much the publicly funded body had put into the firm.

She described the development as "disappointing", and said that SE intended to meet Axeon "as soon as possible to offer the appropriate assistance".



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1

Samcafe,

Glasgow 21/04/2009 07:01:54
'A pre-packaged' administration sounds to me like another fly by night means of escaping ones creditors, have we learned nothing from the all to obvious mistakes of financial jiggery pokery
2

Absolutely Furious,

Birmingham 22/04/2009 13:17:23
Monkey business or just plain piracy
The "Buyers" had to act fast as two days before the budget, the share price was rising sharply, and at that stage the debt to them was still more than the company was worth on paper.
The buyers have grabbed the whole company for only 15 percent of the equity. They did not even have to buy up any more shares.
However the buyer's backers want money, not a battery factory. Returns may be slow or delayed, (Has anyone crash tested large high voltage battery packs?).In the event that they are, the backers may demand a quick sale of the technology, to all to cut their losses and invest elsewhere and maybe get a better return. That is how they make their money.
Manufacture will probably move overseas China, East Europe, Mexico? It is the technology that is important, not the factory.
The taxpayer (SE, Carbon Trust) will end up with nothing and Scotland will will have a few hundred more unemployed to support.
The Directors have been really clever. Are their shares in the company now worthless? Or did they cut a slippery deal?
They could certainly teach the Somalis a thing or two about piracy.

3

Jamesb2012,

Axeon Shareholders done out of money 24/04/2009 20:53:43
We have started a forum to rally support for all those that lost money on the recent deal that went through when Axeon was aquired by Ironsheild.

For those with a vested interest I think you will agree that there is something majorly wrong with the aquisition.

Get together with other shareholders that lost out vast sums of money over night.

We started a discussions board for this reason alone....

http://axeon.myfastforum.org/sutra44.php#44




Thanks James
4

Coldfeet,

Waterlooville 25/04/2009 17:51:19
I cannot believe that a Company is allowed to act in the way that Axeon, Ironshield have done. They did not inform the Shareholders (the small ones anyway) that there was a problem or that they were looking for a buyer for the Company. I feel that Ironshield (who I understand is/was a shareholder in Axeon)acquired the Company because they know their true potential.....We hear how the Government are intending to promote GREEN vehicles, I wonder if we will see that MODEC (Axeon was their battery supplier) will receive government funding. I understand that they have been shortlisted amongst other Companies. Axeon no doubt would have been aware of that. Would Ironshield not allow more time ?? No, they know the potential of the Company especially if Government funding is given. If it comes to light that AG Holdings, (as Axeon is now known) directly or indirectly benefit from these funds that clearly shows there was wrong doings here. Axeon would have used this as a bargaining tool and I am sure Ironshield would have been more than happy to allow more time. They are greedy and they want it ALL. It is WRONG.
5

Green Investor,

London 27/04/2009 09:32:19
A Personal Endorsement

Just a few words to bring to the attention of internet investors, the amazing change in value (by a factor of twelve in a little over two hours) of shares in Axeon Holdings on the 20th April 2009.

While it may not be practical here to individually name and personally thank all of those who were responsible, there is no question that it was deliberately orchestrated by the executives of Axeon Holdings, AG Holdings and incarnations, and of course those stalwarts at Ironshield Capital management.

Any serious investor with experience of the above companies, who have displayed astonishing new levels of inventiveness and integrity, should jump at the opportunity to hunt down and deal with this outstanding team.
6

Green Investor,

London 27/04/2009 11:39:39
Whizzo Wheeze or Big steaming Pile?

The AG Board claim that Axeon was "discretely marketed earlier in the year". How is it they can claim in one statement that it was a lost cause, and then in the same statement say" we believe they have a promissing and exciting future"?

Who did they contact about off-loading this basket case?
Was it Scottish Enterprise, whose 1.7M shares are in AG's own choice words (with only a hint of a snigger) "expected to crystallize in a 100 per cent loss"?
Scottish Enterprise had 1.7M shares that were finally rising. In only a few months the money from them could have been used to help more deserving causes. (Now it is too late, as it looks like government money is drying up. Never mind. There is still the dole).
And what did SE do after their investment was deliberately wiped out? Did they storm round demanding explanations? Or did they meekly express disappointment, and ask if there was anything else the perpetrators wanted?

Perhaps the Board of Axeon made a tremendous effort to find a replacement for the indecisive Principal Lender.
Even before the Budget it was well known that royal Bank of Scotland and Lloyds bank were being encouraged to lend to worthy causes, and both were eager to please. Did they?

n the end what shot out of the woodwork had the guiding principal of "Why pay for something when you can take it"
If anyone else went into a shop and decided to take something without paying for it they would be fined or even spend time inside. In this case it still seems that in the business world such rules are for little people.
What will they do now? Will someone just say "thank you for screwing us, would you like some more?"
When you get down to it, isn't this exactly the same kind of shifty underhand dealing that wrecked the economy in the first place?

But really, is it any wonder that the financial world continues to display it's utter contempt for a government, whose self-serving members main interest in thi
7

Green Investor,

London 27/04/2009 11:44:02
Continued:
....in this "Economic Accident", is keeping their snouts in the trough for as long as possible?
They probably think it is some kind of Airbag!

 

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