Tauranga-based UBCO has been placed in receivership and its collapse will impact the local business community, Nigel Tutt, chief executive of Priority One, told the Bay of Plenty Business News (BOPBN).
“There’s a bunch of really talented people that work[ed] for UBCO [who] we want to make sure we retain in the community and will be valuable for local companies,” said Tutt.
Obviously, they’ll be concerned about retaining their livelihoods, he added. “For most, or all of them, to remain [locally] – particularly for growth companies – having people who have worked in other growth companies is really important,” he said.
“It was a very smart, talented company and I’m sure they have a bunch of people who we’d like to stay around.”
Winning concept
UBCO was launched in 2015. Originally based on a winning concept of an electric powered, quietly running farm bike, it expanded rapidly and, seemingly, had no difficulty in raising funds to expand internationally. The bike’s silent running was considered a key advantage, according to UBCO’s cofounder, Tim Allan.
In a surprising move, Allan stepped down as CEO in 2021, reportedly because he wanted to return to his original role of researching and exploring new company developments. Currently, he is retained by Priority One to work on research projects.
The other key cofounder, Anthony Clyde, still operates out of Whakatane and remains devoted to exploring new bike designs. Neither Allan nor Clyde were available for comment on the demise of UBCO, but neither retains any significant shareholding in UBCO.
While bike developer, Daryl Neal, is cited as a third cofounder, Virgin Island-based Jubilee Glory Investments is listed as UBCO Holding’s largest shareholder according to the NZ Companies Office.
Sad to see
As Priority One’s Nigel Tutt put it: “Start-ups and growth companies are really, really hard. [UBCO’s collapse is] really sad to see. UBCO is a great company and there’s a really great bunch of people there. Sometimes these things don’t quite fly, but certainly everyone involved should hold their heads high.”
Tutt added that, for a company to do so well when based in Tauranga, demonstrated it was a high class product which managed amazing results.
“I would hope some of those people would continue doing similar things at other companies. A lot of companies don’t finish up flying as high as they intend to, but the learnings from that are important.”
Grant Thornton’s David Ruscoe and Stephen Keen have been appointed as receivers of UBCO.
Ruscoe told BOPBN that Grant Thornton was appointed on January 18 by one of the shareholders, but he would not confirm which shareholder initiated the action.
“As there is no funding available, the receivers have ceased to trade the business of the companies,” Grant Thornton said in a statement. “The business and assets of the companies, including stock and intellectual property, are available for expressions of interest.”
No statement was made about the company’s debts or its creditors.
Mark Phillips, managing director of UBCO Australia from March 2020 until September 2022, said in a news report that UBCO’s rapid global expansion, lack of focus and what he regarded as an overly large management structure contributed to its downfall.
Phillips claimed resources were stretched too thinly on product development, including a trailbike and a quadbike that never reached market leaving surplus, unsellable bikes in warehouses.
Vision collapses
UBCO seemed to be well on the way towards global expansion but that vision has now collapsed.
The company’s receivership came just a few months after UBCO signed a high profile partnership with Australia Post. According to news reports, UBCO chief executive Oliver Hutaff said the company had “bet a large position” of its future on the success of fleet contracts. At the time he said there were also ambitions for a larger rollout, potentially amounting to 10,000 e-bikes, across Australia.
So, what exactly is going on? Clearly, UBCO was having money issues despite managing to raise NZ$70 million in investment funding and landing that high-profile deal with Australia Post. The company’s debts haven’t been fully disclosed but reports suggest that one of its biggest creditors is Callaghan Innovation, a New Zealand Crown agency, to which around $400,000 is owed.
Noted by several observers, as receivership and bankruptcy aren’t the same thing, UBCO may yet survive in some other form.
Grant Thornton’s Ruscoe confirms to BOPBN that the receivers were looking to sell the brand and assets, while noting that there was still some stock available.
“We will, hopefully, find a sale for it [to enable UBCO] to continue,” he said. “These things are always a shock and every business failure is different.”
