Tocardo puts its bankruptcy puzzle together

Tocardo’s Eastern Scheldt tidal energy array (Photo: Tocardo)

Dutch tidal energy developer Tocardo International has provided more information on the activities which led to its bankruptcy – declared in January 2018 – and the ‘re-start’ of the company made possible through a fresh investment secured a month later.

As a result of the article published last week – regarding the ‘unclear status’ of 46.5% share ownership interest the Canadian company Tribute Resources holds in Tocardo, and relating to the bankruptcy proceedings the latter embarked on early in 2018 – the Chief Executive Officer of Tocardo, Hans van Breugel, reached out to offer more details on the case.

Tocardo's tidal energy array (Photo: Tocardo)

Before and after the bankruptcy

Namely, Van Breugel confirmed Tocardo was publicly declared bankrupt on January 9, 2018, after a suspension of payments was granted previously by Dutch authorities.

During the process, the administrator appointed by the Dutch court sought the best legal, commercial and strategic solution for the business, its employees, customers and suppliers – while keeping all stakeholders informed Van Breugel said.

In accordance with the mandatory Dutch law, the appointed administrator kept public records of the status of the bankruptcy which resulted in two official public filings.

The filings state that upon Huisman’s sale of 46.5% shares in Tocardo to Tribute – in an agreement made in July 2016 – Tribute failed to deliver €5 million to Tocardo as agreed, instead providing only €65,000.

In the six months leading to the official bankruptcy announcement, Tocardo’s shareholders and management agreed that Tribute would provide funding for Dutch developer’s operations, according to the filings – so on December 28, 2017, a final request to Tribute for capital injection was submitted, but to no avail.

As Tocardo was left without any available funding in the last month of 2017, the company’s board applied for a provisional suspension of payment on December 29, 2017, with full support of its shareholders.

After being granted the approval, Tocardo’s director and the appointed administrator had frequent contact with Tribute in order to obtain the financing during the moratorium period – according to the filings. However, no concrete financial proposals had been made to answer these requests.

Less than a week before Tocado publicly declared bankruptcy, Tribute informed that the share swap deal under which it was to acquire the remaining 53.5% of Tocardo’s shares – making the Dutch developer its fully-owned subsidiary – would not go forward as as the parties failed to reach the final agreement.

Following a short financial analysis, it was determined that around €1 million was required to cover the costs of the company’s continued operation and the fulfillment of new financial obligations until the creditors’ meeting that was scheduled for March 27, 2018.

Various failed attempts have also been made by the director and the administrator to secure the funding from other financiers and third parties – resulting in the withdrawal of the provisionally granted suspension of payment for Tocardo and its conversion to the bankruptcy.

However, with the emergence of new investors – Tocardo was re-started within five weeks.

The Dutch throw a lifeline for their own

On February 17, 2018 Tocardo announced its activities have been secured through investment by a company owned by private investors and a privately managed public investment fund – owned by the Province of North-Holland.

Since then, Tocardo has continued its hard work which recently resulted in an important agreement with Delta, a Dutch power utility company.

“With the secured financing Tocardo is confident to continue to further grow its business,” Van Breugel said.

Tocardo’s track record holds a number of installed turbines -including the first prototypes (T1) which were installed in the Afsluitdijk – a historic sea defense that has been providing energy for many years now.

Tocado’s T1 tidal energy array in the Afsluitdijk (Photo: Tocardo)

This project has inspired Tocardo to create a new turbine type for yet another Dutch icon – the Eastern Scheldt storm surge barrier in the province of Zeeland, part of the world-famous Delta works, which has also been providing energy for over 2 years now, Van Breugel said.

Tocardo’s Chief Executive revealed that a second 2MW fully-consented project in the Eastern Scheldt storm barrier is expected to be installed in 2019. The company has applied for a feed-in tariff from the government, and is working towards financial close for the project, Van Breugel said.

Also, the coming year will see Tocardo finalizing the engineering for its offshore 2MW Universal Foundation System (UFS) – planned for installation at the European Marine Energy Centre (EMEC) in Scotland in 2019. The UFS technology is available for all offshore projects in Europe, Canada and Far East, according to Van Breugel.

“Tocardo is in the better shape than in the last two years. It is financially more healthy than in the past. Tcardo is expecting that tidal energy will play a major role in the energy transition mix worldwide and is ready to deliver. The re-start made Tocardo’s shareholders base stronger and again a 100% Dutch-owned company,” concluded Van Breugel.