Onto Holdings Limited - Case Update

The joint administrators of electric car subscription service Onto have filed their proposals outlining how the firm folded after a going concern offer was withdrawn.

The Onto Group was historically loss making at an operational level, using investor money to fund losses. In addition, the Group was impacted by the deterioration of the battery electric vehicle (BEV) market in early 2023 as a result of an increase in supply, price cuts on new BEVs and macroeconomic issues affecting consumer appetite for BEV purchases.

The companies’ outstanding debt in relation to the BEVs totalled £135 million at July 2023 – materially higher than the value of the fleet – putting the companies offside their loan covenants. A standstill agreement was reached with secured creditors, and a solvent offer was received to purchase Onto’s shares. However, that offer was withdrawn during the due diligence process.

After it became evident that a solvent solution could not be reached before cash resources ran out, the directors decided to file for administration on 11 September. Jonathan Lees and Gavin Maher of Teneo were appointed joint administrators of Onto Holdings, while Gavin Maher and Ian Wormleighton of Teneo were appointed joint administrators of certain subsidiaries.

The company is now continuing to receive subscription income while administrators search for a buyer. Secured creditors are unlikely to be repaid in full.

The joint administrators’ proposals can be found HERE. They have been assisted by Reed Smith, Macfarlanes, Clyde & Co and Hilco.