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Story Archives: V-Vehicle confident of loan approval


V-Vehicle confident of loan approval
by Michael DeVault - posted Wednesday, September 23rd, 2009 @ 8:03 pmE-mail Story E-mail Story | Print Story Print Story 
A Department of Energy official says no loan will be approved for V-Vehicle Co. in the "foreseeable future," but a V-Vehicle official says the company feels "very optimistic" about its prospects to receive the money.

Ebony Meeks, a spokesperson for the Department of Energy, said, "I don't know whose wires got crossed where, but we currently have no plans to announce any approvals of ATVM loans in the foreseeable future."

Meeks was referring to the Advanced Technology Vehicles Manufacturing Program, a $25-billion program to assist companies in producing low-emission, high mileage vehicles. The program was part of President George W. Bush's efforts to spur innovation in fuel-efficiency and alternative energy automobiles.

Meeks was asked to comment in light of remarks U.S. Rep. Rodney Alexander made at a West Monroe-West Ouachita Chamber of Commerce function. He told the chamber crowd that he expected the Energy Department to announce "in the next few days" that it had approved a low-interest loan for V-Vehicle. V-Vehicle is a start-up company, which has plans to launch an automotive manufacturing operation in the former Guide plant off Interstate 20 east of Monroe.

Joe Fisher, a spokesperson for V-Vehicle, said, the company filed its ATVM loan application with the Department of Energy in March. The application was deemed complete in May, according to Fisher.

"We now are in involved in the due diligence process with the Department of Energy, and we feel very optimistic about our prospects," Fisher said. "We would not expect any decision on our application until the due diligence process is complete."

When V-Vehicle announced its plans to take over the former Guide plant, at lest one company official, Ray Lane, said V-Vehicle had applied for a more than $300 million ATVM loan to aid the company's efforts in establishing a manufacturing operation here.

Meeks said the Energy Department could not comment on the specifics of any loan applications.

"The applicants can comment if they so choose, but we can't discuss the specifics of a participant's application for proprietary reasons," Meeks said.

The financing V-Vehicle seeks from the Energy Department is crucial to the company to attract venture capital investors, Lane said in June when V-Vehicle announced its plans for the former Guide plant. Lane said the loan would take the company to "the next level" in its quest for financing.

"When you're building a company that takes nearly $500 million to get off the ground, if you can get $300 million worth of non-diluted debt with some minimal equity requirements, that's pretty good," Lane said at the time. "So the government is taking an active role in ensuring we increase our café or fuel efficiency in this country."

A number of automotive companies have applied for ATVM loans since the program began last year. So far, the Energy Department has approved four loans totaling some $8.5 billion.

Ford Motor Co. received $5.9 billion to retool three of its factories to manufacture fuel-efficient cars. Also, Nissan Motors received a $1.6 billion loan to revamp a plant in Smyrna, Ga.

Automotive start-up Tesla Motors was awarded some $465 million to expand production of its line of all-electric trains and automobiles at its California facility.

The most recent loan went to Fisker Automotive, a start-up company, which manufactures a line of plug-in, gas-electric hybrids. Fisker received some $587 million, according to an Energy Department news release issued Tuesday.

"Our understanding is Fisker submitted its application three months before we submitted ours," V-Vehicle's Fisher said.

In light of the Entergy Department's decision to loan money to Fisker, Meeks said she was unaware of the status of any other loan applications. As loan applications are approved, according to Meeks, the Energy Department schedules announcements.

Meanwhile, on Oct. 17 Ouachita Parish voters will decide the fate of a property tax proposition to help pay for an incentives package local officials pledged to aid V-Vehicle's venture.

The 1.8-mill assessment would be used to help fund some $15 million in incentives for V-Vehicle.

The "V-tax" has been met with mixed opinions in the community.

Both the Monroe and West Monroe/West Ouachita chambers of commerce endorsed the tax. Also, a number of area ministers have said they will support the tax as well. Their support drew a quick rebuttal from conservative talk show host Moon Griffon.

In the event that Ouachita voters do not approve the tax, local governments are still obligated to fund most of the $15 million incentives for V-Vehicle.

Ouachita Parish police juror Walt Caldwell said a number of things could be done if the tax failed.

"Our portion (police jury) is a little over $3 million," Caldwell said. "At this point in time as a group, we've not explored any options that could replace the funds from the taxes if it doesn't pass."

Caldwell expressed confidence the police jury could meet its obligation if the tax failed.

"I personally believe we could find it," Caldwell said. "But because money is not readily available, it could affect certain people in certain circumstances in different ways, depending on how we decided to make up that revenue."

Besides the $15 million incentives package governments in Ouachita pledged, the state committed some $134 million in incentives for V-Vehicle.


Sam Hanna Jr., publisher of The Ouachita Citizen, contributed to this report.
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