Reprieve for Smith Electric

Embattled alternative-energy truck manufacturer Smith Electric has received a funding lifeline from a Chinese battery company, but its future is still in doubt

Following on from the news that American alternative-energy truck manufacturer Smith Electric had closed its doors, the firm has announced that it plans to re-open its Kansas City production facility after receiving $US42 million ($A45.5 million) of investment from Hong Kong based battery producer, Sinopoly Battery.

The injection of funds will be used to re-open Smith Electric's production facility in Kansas City, while the deal will also see Sinopoly Battery become the truck manufacturer's exclusive supplier of batteries.

A raft of cost-saving measures will also be rolled out in coming months, before the production lines re-open around mid-2014.

According to a report in the Kansas City Star newspaper, Smith Electric has already received an initial payment of US$2 million ($A2.2 million), with the remainder of the funds to be relinquished in two phases over the next three months.

It's a life-saving move for the ailing alternative-energy truck specialist, which was established with the help of a US$32 million ($A34.6 million) grant from the US Department of Energy back in 2009. It is not yet known how many of the 125 staff on the company's books at the time of its production stoppage late last year will be reinstated.

Smith Electric has supplied medium-size electric trucks to corporate heavyweights including Staples and Coca-Cola, among others.

In a company statement, the CEO of Smith Electric, Bryan Hansel, said the lifeline represented a great opportunity for both companies.

"Demand for all-electric commercial vehicles is rapidly increasing in China," he said.

"This investment provides both companies with the opportunity to leverage the synergies between our operations."

However, according to the Kansas City Star, there is still some doubt hanging over the deal.

A British investor in Smith Electric, Tanfield Group, has voiced concerns that the public listing of the firm – a requirement of the Sinopoly deal – won't proceed. The approval of current investors would be required to facilitate the listing – investors who are worried that such a move would lower the value of their stakes.

"The board of Tanfield believes there is still a very high level of risk that the planned listing process outlined by the Smith management will not be successful," the company said in a statement.

Reprieve for Smith Electric

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