Zap, a designer and manufacturer of electric vehicles, has secured up to USD25m in financing with Cathaya Capital.
Zap, a designer and manufacturer of electric vehicles, has secured up to USD25m in financing with Cathaya Capital.
With offices in Silicon Valley, Cathaya is backed by financier Jacques de Chateauvieux’s Paris-based Jaccar Holdings and intends to manage the investment through its affiliate Better World International.
Zap will use a portion of the funding to pursue longer-term contract production and assembly commitments, and to accelerate deliveries of trucks and vans to fill current fleet and government orders. It also plans to further broaden and accelerate its development of power train technology that improves overall performance of its vehicles while achieving cost reductions.
Steven Schneider, chief executive of Zap, says: "This is a critical juncture for Zap as we now have the means and resources to begin addressing the opportunities at hand on a global basis and to fully realise the leadership position possible in the electric vehicle marketplace."
Financing includes a private placement of 20 million shares of common stock for aggregate proceeds of USD5m and a secured loan facility of up to USD10m that will be advanced to Zap provided certain conditions are met. In connection with the financing, the investor also was issued warrants exercisable for up to 16 million shares of common stock at USD0.50 per share.
Dr. Priscilla Lu, general partner of the investor and founder of Better World, says: "We made this investment in Zap based on the belief that the new focus and resources now available to the company will allow it to become a market leader, fully realising its potential and leveraging its long history and experience. We believe Zap’s experienced management team has the in-depth, practical know-how in the electric vehicle industry that will provide the foundation to succeed in markets and partnerships in Europe and China."
The proceeds of this financing also will enable ZAP to expand its vehicle distribution network into the European Union where recent government incentives supporting the adoption of electric vehicles have increased demand for practical models at affordable prices. In addition to targeting market opportunities in the EU, Zap intends to pursue automotive opportunities in China. Last month, the China Daily called for government incentives on the purchase of vehicles that reduce pollution and minimize dependency on oil.
Today’s announcement brings a total of up to USD31m in new financing for Zap’s electric vehicle capital expansion since June. In addition to the Cathaya package, up to USD6m in financing was placed by the Banks Group in June consisting of USD2m in cash and USD4m in warrants at USD0.50 per share.
