Volvo's “supply cut” was a fatal blow! Lidar giant Luminar (LAZR.US) went bankrupt and owed up to $1 billion

The Zhitong Finance App learned that Luminar (LAZR.US), which produces laser sensors for automobiles, applied for bankruptcy protection soon after the contract with Swedish car manufacturer Volvo Cars was terminated. At its peak, Luminar's valuation was as high as $5 billion.

The Orlando-based company filed a Chapter 11 bankruptcy protection petition in Texas Southern District Court this Monday. In its bankruptcy filing, the assets listed were between 100 million and 500 million US dollars, while liabilities were between 500 million and 1 billion US dollars.

Luminar said in a statement that before filing for bankruptcy, it had reached an agreement with Quantum/Computing to sell shares in its subsidiary Luminar/Semiconductor to the latter at a price of US$110 million in cash. The company stated that under the sale procedure it is seeking under section 363 of the Bankruptcy Act, the transaction may change as a result of higher or better offers. The company is also seeking to sell its lidar business, which produces sensors for autonomous driving systems.

The statement said that in order to facilitate these transactions, fund Chapter 11 bankruptcy proceedings, and support operations during the sale, a temporary creditor group has agreed to Luminar's use of approximately $25 million in cash under an agreed cash guarantee order.

The group represented 91.3% of the company's first lien notes and approximately 85.9% of second lien notes. Luminar said in a statement that during the Chapter 11 bankruptcy process, the company expects to continue operating the business and work with suppliers and partners to minimize disruptions and maintain delivery of its lidar hardware and software.

There were early omens

The auto parts manufacturer said in a November 17 document that it was notified that Volvo had terminated its supply chain relationship with its lidar products. According to the document, Luminar had previously filed a major loss claim with Volvo and suspended supply commitments for some of the automaker's products.

According to a financial report, Luminar reached a grace agreement with most bondholders on October 30 after its senior bonds and 2030 convertible bonds had already defaulted.

When Luminar left as early as May of this year, internal strife was suddenly revealed. The founder and CEO left for the first time due to “business ethics” issues, exposing the plight of the once limitless top 2 lidars to the public.

Since then, news of large-scale layoffs has spread for Luminar, and the cash flow is getting closer to a “thunderstorm.” Even the CFO left his job at the end of last month on the grounds of “seeking other career opportunities” and “not because of any disagreement with the company's financial situation or auditors.”

This is tantamount to a tactful way to claim to the outside world that Luminar has run out of skills in terms of finance and business.

Luminar is now bankrupt; in fact, it's only been over two years since its peak of market capitalization of 5 billion US dollars.