* Car maker in "urgent financial distress" seeks state aid
* Says working capital difficult to get, needs up to $29 mln
* Says suppliers severely hit by crisis
* Temporarily halts production in Norway, eyes Q1 restart
(Adds more, details, comments from news conference)
By Aasa Christine Stoltz
OSLO, Dec 15 The Norwegian maker of the
two-seater Th!nk City electric car said on Monday it was halting
production and seeking state aid to escape its "urgent financial
distress", which was sparked by the global financial crisis.
Like many other car companies, privately-held Think said it
had difficulties in obtaining working capital and that
automotive suppliers offered tougher terms on parts.
"We are in a very serious situation," Chief Executive
Richard Canny told a news conference. He Canny said the company
would probably not survive without the government's help.
Asked about the risk of bankruptcy, he said: "We would not
have take these actions if it was not serious. We need to
intensify efforts to bring in new capital."
He said Think needed 100 million to 200 million crowns
($14.5 million to $29 million) in the short term through
guarantees, but declined to be specific on total capital needs
for its planned expansion.
Think said it would temporarily stop production at its
Norway plant and lay off 50 percent to 70 percent of its
employees while sorting out its financial problems.
He said it was hoping to restart production in the first
quarter of 2009.
Think said there are "limited possibilities for funding
working capital through bank credits without extra guarantees in
today's financial markets."
The company has gone bankrupt twice, last in 2006, but found
new life with the backing of new owners and investors.
"I honestly think given what is going on in the capital
markets it is going to be very difficult," Canny replied when
asked whether it would make it without the government's help. He
said the company was in a "good dialogue" with the government.
"Every day we are getting increasingly positive signals."
Earlier in December, the Swedish government said it would
provide up to 25 billion Swedish crowns ($3.15 billion) in
credit guarantees and emergency loans to its ailing auto
industry, but has no plans to buy stakes in Volvo or Saab.
With one car model in production, the micro Th!nk City, the
group plans to ramp up production next year, launch the car in
several European cities and set a date for its U.S entry.
Th!nk City has been in production since late October, and
the company produced between eight and 10 cars a day. It aims to
reach 44 units a day when running at full capacity sometime in
The company also aims to launch a four-seater version of
Th!nk City, which is an emission-free, 95 percent recyclable car
with a maximum speed of 65 miles an hour.
A five-seater is expected to be in production by 2011.
"We are ... about to become the world's largest electric
vehicle manufacturer which will grow over the next 6-12 months
period as we expand from hundreds of units to thousands of
units," Canny told foreign reporters during a visit to its
offices and production plant on Friday.
Think plans to launch its offer in Copenhagen and Stockholm
first, then moving to Paris and London. Th!nk City -- about the
size of a Toyota Yaris or Honda Fit -- runs on sodium or lithium
batteries and can travel up to 110 miles (177 km) on one charge.
In Norway, which has high taxes on cars, the two-seater
costs 212,500 crowns ($30,950), compared with about 170,000 to
190,000 crowns for comparable petrol cars, Canny said.
(Editing by Andrew Macdonald)