Azure Dynamics files for bankruptcy protection in Canada; company coverted Ford vans from Avon Lake into hybrids

Published: Tuesday, March 27, 2012, 11:26 AM     Updated: Tuesday, March 27, 2012, 2:51 PM
 
 
 
 
Azure.JPGView full sizeStefan Barthel, in the vehicle, and Kevin Oversby, both from Azure Dynamics' Vancouver office, test the power output of a hybrid van in this 2008 file photo..

CLEVELAND, Ohio -- Azure Dynamics, a Detroit company that converted Ford commercial vans into hybrids and electric vehicles, has filed for bankruptcy protection in Canada.

"The current Transit Connect electric and Balance Hybrid vehicles that are on the road with our customers will continue to be serviced by Ford dealerships," Azure vice president Juris Pagrabs said Tuesday. The Balance Hybrid is the company's name for Avon Lake-built E-Series vans that it converted into hybrids.

The Transit Connect is a small commercial van that Ford imports from Turkey. Ford in 2010 awarded Azure a contract to convert the small vehicles into battery powered vans.

Ford spokesman Wes Sherwood said the automaker is monitoring the situation with Azure and working to make sure its dealerships can support hybrid and electric van owners who need service. He added that Ford has not yet decided if it will try to find a new company to supply hybrid and electric conversions for its vans.

Founded in Canada, Azure moved its headquarters to Detroit's suburbs in 2008 after having considered sites in Northeast Ohio. At the time, the company's largest contract was converting E-Series vans for Ford.

Like many startups, Azure was losing money rapidly as it invested in new technologies while selling small numbers of its existing products. Pagrabs said the company had stayed viable by selling stock to investors at regular intervals.

It had planned to selling between $12 million and $20 million in stock this year to investors in the United States and Canada later this year, but this month, the Ontario Securities Commission rejected financial filings the company had made.

In an email, officials with the securities commission said that while Azure had filed a preliminary prospectus in February, it had not yet filed a completed document.

On Monday, the commission said it sent Azure a letter with a "number of outstanding questions and concerns about Azure, its proposed prospectus offering and the disclosure set out in the most current draft of the prospectus."

Azure's prospectus filing raised several concerns about the viability of the company. Among other issues, it acknowledged that it has never been profitable, the market for electric and hybrid vehicles has not developed as quickly as the company had hoped and that the $12 million-$20 million to be raised in the stock sale might not be enough to cover 2012 expenses.

Commission officials declined to provide a copy of the letter, saying such documents are not part of the public record in Canada.

Pagrabs said that it had investors lined up to buy the stock, but without regulatory approval to sell it, the company did not have enough cash on hand to continue operations. It has stopped taking orders on new vehicles and is working with Ford to determine what to do about vehicles it has finished converting but has not yet shipped.