Netled Oy is applying for corporate restructuring, according to the insolvency register.
CEO Niko Kivioja confirms the restructuring procedure to Kauppalehti.
"The company runs on investors' money. To obtain funding and improve the company's financial situation, there was no choice but to apply for this arrangement and seek breathing space and build new growth," Kivioja says. "The general spirit of the times is such that investors are cautious".
In the restructuring application submitted to the Pirkanmaa District Court, the company justifies the financial difficulties with "strong R&D investments" and a "business model that has proven unprofitable"
"In addition, the huge increase in material and component prices as a result of the coronavirus pandemic and the war in Ukraine, rising interest rates and increased uncertainty in the market situation have affected the company's ability to perform financial results," the application states.
The company has focused especially on the North American vertical farming market. Last May, Kivioja told Kauppalehti that rising interest rates had delayed project financing.
The restructuring application shows that Netled generated net sales of approximately EUR 1.1 million in the financial year ending in September 2023. In the previous financial year, net sales had been approximately EUR 5.5 million.
The amount of losses deepened, from approximately EUR 2.3 million to over EUR 3.6 million.
According to the restructuring application, the company has approximately EUR 170,000 in assets in its operating fund.
The company has a total debt of approximately EUR 3.1 million. According to the application, Netled's total assets amount to approximately EUR 2.1 million.
"Moving forward with a strong and credible strategy"
According to Kivioja, Netled is now facing a "quite significant strategic change of direction".
"From now on, we have drawn up a pretty strong and credible strategy. Without the prerequisite for the continuation of the company, we would not even have been able to apply for restructuring."
Last spring, Kauppalehti awarded Netled as the toughest growth company in Western Finland.
Netled's story began in Honkajoki (now Honkajoki). Kankaanpää) from the Kivioja family farm, which at its peak produced 90 per cent of Finland's organic tomato crop.
In 2009, Kivioja's father asked his son, who was spending his exchange year in Malaysia, to get to know the electronics and component manufacturers in the area. Kivioja returned home with a bunch of contacts from his partners.
The first innovation of the company, which was separated from the greenhouse business, was a 25-meter-long light curtain sewn from LED strips and frame textile, designed to illuminate leaves in the shade of tall plants.