Advanced car manufacturer Tomcar Australia has entered voluntary administration due to “high manufacturing costs” and “hostile investors”, according to a media statement.
The Melbourne-based business, which was founded in 2005 and had five employees, has ceased operations, citing a situation with an investor, which led to legal proceedings and “escalating” legal costs.
At the end of the 2017 financial year, the company recorded $1.55 million in revenue, and had been working with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) on a $100,000 feasibility study to turn its cars electric.
Investigations are underway by administrator Jirsch Sutherland to determine whether the business can be sold, and what assets are available for sale.
Company director, David Brim, said that the decision was “a devastating turn of events” for Tomcar Australia, which had “such high hopes” for a niche vehicle-manufacturing sector in Australia.
“We have had to close our doors because of a group of hostile investors tried to take over the company from us, while ever increasing manufacturing costs have put untold strain on the cash flow of the business,” Brim said.
“We recently had an overseas investor about to come on board but at the last minute they backed out, leaving us with escalating legal fees and product costs, which simply pushed us over the edge.
“We want to thank everyone who supported our dream over the years and helped us along the way. It has been an incredible journey. We’ve tried our very best, but we couldn’t quite get there.”
A creditors’ meeting will be held in due course.