Modec says funding deal "imminent"
ELECTRIC vehicle pioneer Modec has vowed that its future is secure after confirming it is in advanced talks with a new funding partner.
It was revelealed this week how directors at the Coventry-based van-maker reported in its most recent accounts that “the company continues to face a difficult funding position to enable it to realise its growth potential.”
Bill Gillespie, chief executive, said the funding talks were continuing and an agreement was “imminent”.
“I don’t want to be drawn on who the discussions are with but they are at an advanced stage and an agreement is imminent. We will be announcing more once the deal has been agreed,” he said.
The move is expected to free up the firm to invest in the development of its electric truck and van, which has proved a major hit in Europe but has been slow to catch on in the UK.
Professor David Bailey, of Coventry Business School, said the firm was a classic example of a British company being innovative but which had failed to secure the funding it deserved.
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“I really hope the business can be secured because the work it is doing is very important. The technology is cutting edge and if we are serious about the future of electric vehicles then it should be supported,” he said.
He said one way of increasing the number of Modec vehicles on Britain’s roads was for the Government to overhaul its procurement programmes and offer incentives to local authorities willing to operate the emission-free vehicles.
So far a few London boroughs are using the vans, while Coventry took the lead locally and began using them last year.
“The Modec vehicle is ideal as a point-to-point delivery vehicle in cities but there is something wrong with procurement problems when this type of thing is not encouraged,” added Prof Bailey.
His stance was supported by Mr Gillespie, who said: “Our vehicles have been used in Amsterdam, Barcelona, Paris and Copenhagen for some time and yet Coventry only began using them last year.
“Since being launched, our vehicles have completed something like four million miles – proof they are a viable means of transportation.”
The private sector has been much quicker to embrace the technology and the van is used for deliveries by many leading firms including: Tesco; Marks & Spencer; UPS; and Fed-Ex.
The company, which employs 70 people, will be hoping it can turn around its fortunes. Its latest accounts show it made a net loss of almost £6m at the end of December 2009 and had net liabilities of almost £29m.
To ensure its survival, the company spent much of last year trying to secure financing.
In their report to the annual accounts, the directors said they were “confident of the future viability of the vehicle under the ownership and control of the third party”.
