Luminar (LAZR), which makes laser sensors for cars, filed for bankruptcy protection shortly after its contract with Swedish automaker Volvo Cars was terminated. Luminar's peak valuation was as high as $5 billion. The Orlando-based company filed for Chapter 11 bankruptcy protection in the Southern District Court of Texas on Monday. In its bankruptcy filing, it listed assets between $100 million and $500 million and liabilities between $500 million and $1 billion.
Luminar said in a statement that before filing for bankruptcy, it had reached an agreement with Quantum/Computing to sell the equity of its subsidiary Luminar/Semiconductor to the latter for US$110 million in cash. The company said the deal could change if a higher or better offer emerges, subject to the sale proceedings it is seeking under Section 363 of the Bankruptcy Code. The company is also seeking to sell its lidar business, which makes sensors used in self-driving systems.
To facilitate these transactions, fund Chapter 11 bankruptcy proceedings and support operations during the sale, a temporary creditor group has granted Luminar access to approximately $25 million in cash under an agreed cash security order, the statement said.
This group represents 91.3% of the company's first lien notes and approximately 85.9% of its second lien notes. Luminar said in a statement that it expects to continue operating its business during the Chapter 11 bankruptcy proceedings and working with suppliers and partners to minimize disruption and maintain the delivery of its lidar hardware and software.
There was a warning
The auto parts maker said in a Nov. 17 filing that it received notice that Volvo had terminated its supply chain relationship for its lidar products. The filing shows Luminar had previously filed a significant loss claim against Volvo and suspended supply commitments for some of the automaker's products.
Luminar reached a forbearance agreement with a majority of its bondholders on Oct. 30 after its senior notes and 2030 convertibles, according to a financial report.bondsThe contract has been breached.
Luminar leaves early this yearIn May, internal strife was suddenly revealed. The founder and CEO resigned due to "business ethics" issues. For the first time, the plight of the once-famous global top 2 lidar was exposed to the public.
Since then, Luminar has been reported to have massive layoffs, and its cash flow is getting closer and closer to a "thunderstorm". Even the CFO resigned at the end of last month, citing "pursuing other career opportunities" and "not due to any differences with the company's financial situation or auditing agencies."
This is equivalent to a euphemistic way to declare to the outside world that Luminar has no way to turn around whether it is financial or business.
Luminar is now bankrupt. In fact, it is only more than two years since its peak market value of US$5 billion.