In 2013 Jostein appeared able to get beyond his secretive grouping of investors who put their money into Clydemont and Alevo in order to cleanse it, and was actually able to attract real investors, even at tremendous valuations! (Much of it based on an unrealistic business plan but which was very well sold).
Being both Chairman & CEO, Jostein had absolute power, and felt entitled to use shareholders’ money as he wanted. Groupthink ruled and the company had no CFO who might be expected to dutifully control costs. No wonder Jostein ensured that he was paid over $1 million per annum, paid mostly to his offshore BVI company, Clydemont Finance. In addition to this, people of often limited professional skills who had stuck by him and mostly adhered to the groupthink were awarded prominent positions with highly desirable compensation packages. There was only one other board member who was also happy to enrich himself at shareholders’ expense and go along with the good times whilst disregarding his statutory obligations to shareholders and not presenting financial accounts nor arranging Annual General Meetings.
Jostein always wanted to have things big, and his crowning glory came when he was able to secure a former Philip Morris 2,023-acre site in North Carolina for $68.5 million in April 2014 and then have a launch event in October 2014 at which the Governor of the State of North Carolina spoke and hugs to Jostein abounded. Expectations were as exciting as the rocket launch used in the promotional video screened to the audience. Jostein had promised so many jobs would be created and a great regeneration program.
Most press articles that were copied onto the Alevo website were mentioning that the company had raised $1 billion to secure the expansion. The accounts as of 31 December 2014 show at most CHF 200 million (about the same in US$). It appears that there had been a slip in communication from Alevo’s PR machine, but this was never corrected as management probably thought that the larger the number, the more solid, respectable and better the company looked.
As a Reuters article at the time pointed out “Typically in high-tech manufacturing, companies use pilot projects to prove their technology to investors and potential customers before ramping up. That’s not how Eikeland is proceeding. “Building as big as we did, it might seem a little bit risky,” said Eikeland, who described himself as “a controversial guy.”
Producing on a mass scale will make Alevo’s technology cost-effective from the start, Eikeland said. The high cost of grid storage has prevented it from being deployed more widely.”
At an early stage in the process Jostein had dismissed concerns from others on his team that it may be wiser and less risky to simply outsource the battery production.
Jostein and his team were so certain of their imminent success that they did not ask for any state subsidies which they certainly would have obtained, and which the next (interim) CEO did apply for. Things appeared to be going so well that in February 2015 one of the company’s executives happily declared “We are always on the hunt for acquisitions of good technology, we have an active M&A department.’
“Gates estimates that the company’s investment in the supply chain to date has been approximately $1bn, free of tax incentives.
Short-term loan CHF 1,351,489 + Convertible Notes 9,925,385 + Shareholder Loan 243,581 + Long-term liabilities 72,394,181 + Share Capital 116,278 + Share Premium 82,477,625 + Other reserves 29,996,250
Theengineer.co.uk, February 20, 2015