Tuesday, 5 December 2017

Torotrak: squirming for survival

Torotrak plc, well known for the paucity of late of vital shareholder information, is expected to make a statement later this month about Flybrid Automotive.

The founders of Flybrid Automotive are looking to extricate themselves from what appears on the surface to be the debris of Torotrak Plc.
Flybrid developed a name for itself through its flywheel technology (and patents) – a means of absorbing energy which, at a later stage can be released as a device to improve fuel economy, or boost power output.
In a statement, Torotrak plc, a developer and supplier of emissions reduction and fuel efficiency technology for vehicles, announces that, further to the announcements on 28 November 2017 and 1 December 2017, the Board has received notification that Jonathan Hilton and Douglas Cross have filed an application for administration for Flybrid Automotive Limited. application is listed for hearing on 15 December 2017.
The Board meet with its administration advisers to consider if any value can be generated from its assets or whether the Company should to be put into administration.
The Company will make further announcements in due course.
It may be recalled that Hilton has recently completed a year as president of the UK’s Institution of Mechanical Engineers.
Hilton joined the Institution as a young member in 1982 when he started his engineering career with Rolls-Royce military engines group at Leavesden, Hertforshire. Completing the Rolls-Royce undergraduate training scheme and graduating from the Hatfield Polytechnic, Jon took a first appointment in helicopter engine design.
His passion for engines led him to Formula One and in 1991 he moved to Cosworth where he rose up the ranks from engine designer to chief engineer of the F1 programme by the end of 1997. In 1998 Jon moved to the TWR Arrows team as chief engineer of the F1 Engines group and here he built up a team of skilled engineers to design and develop F1 engines for TWR.
In early 2003, Hilton moved, along with the whole of his F1 engines team, to Renault F1 where he formed the UK based engine division for the team. As technical director Engine Division, Hilton was involved with a successful period for the team, which won drivers and constructors Formula One World Championships in 2005 and 2006.
In January 2007, Hilton with former Renault F1 colleague Doug Cross, formed a new engineering company called Flybrid Automotive to develop high-speed flywheel based hybrid systems for automobile application.
As managing director, Hilton ran the company providing direction for all activities and with prime responsibility for commercial aspects of the business until January 2014, when Torotrak PLC acquired the company. Hilton occupied a non-executive role as deputy chairman of the parent company.
Hilton has held various official posts at the Institution including chairman of the Midland Region, chairman of the Automobile Division and chairman of the Formula Student organising committee.
Two years ago, in August 2015, following a  period of “resetting the strategic focus of the fgroup to commercialise its technology”, new Torotrak chief executive officer Adam Robson saw Torotrak’s key markets as being bus, off-highway and passenger car with KERS (kinetic energy recover systems) and V-Charge appearing to take centre stage compared with the company’s original focus of development, namely infinitely variable transmissions (IVTs). Hmmm.

Interestingly, it is understood Flybrid Automotive Ltd cost Torotrak plc of the order of £11 million in 2014 with a potential further £15 million should performance targets be met. Unsecured loan notes of £1.8m, were given as part of the deal, and were repayable subject to certain commercial targets being met. It is possible these form part of the current dispute. 
A few FTSE companies show their shareholders utter disdain by failing to correctly 'reward' them; Torotrak plc is certasinly one of them.
It now remains to be seen what happens to the technology, know-how and patents stored within Torotrak – and the value placed upon  them.

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