SE loses out as Axeon sold to Ironshield

Published on Monday 20 April 2009 21:35

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".