Bicycle maker Cowboy faces financial difficulties

Belgian bicycle maker Cowboy will have to file for bankruptcy if its financial situation does not improve soon, according to the company’s recently published annual report.

“Based on current forecasts, management indicates that, without a clear prospect of substantial additional financing in the coming weeks, the company will run out of cash,” the report reads.

“The company will no longer be able to meet its payment obligations necessary for the continuity of its operational activities, with the need to file for bankruptcy in the short term.”

The Brussels-based company manufactures high-tech electric bicycles that cost at least €2,700, but has been struggling with financial problems for years, Bruzz reports.

Losses continue to mount. Last year, Cowboy made a loss of €21.9 million on a turnover of €21.7 million.

An ongoing recall due to a problem with some frames could cost a total of €5.6 million, the company reports, while a provision of €2.8 million was set aside for this in 2024.

What is particularly alarming is that the company’s equity is becoming increasingly negative and now stands at more than €43 million. Negative equity is an indicator of imminent bankruptcy.

Cowboy’s survival is likely in the hands of French bicycle manufacturer Rebirth, with whom negotiations are under way for an equity investment.

Cowboy said that discussions, with long-term financial commitments, were going well, but there has been no breakthrough yet. A bank is also involved in the negotiations.

“The plan combines additional financing in the shortest possible term, recapitalisation through debt-to-equity conversion and a new bond loan, in addition to the restructuring of existing debts,” Cowboy said.

This would allow the e-bike company to continue for at least another 12 months, with the prospect of a definitive long-term solution.

But if the deal does not go through, the outlook is bleak and the Brussels-based e-bike brand's survival is in jeopardy.

Cowboy was founded in 2017 by Adrien Roose, the late Karim Slaoui and Tanguy Goretti and was long considered one of the most promising growth companies in Brussels.

Like many companies, it struggled during the pandemic and emerged somewhat battered, but the brand continues to boast a solid and positive reputation and the firm's e-bikes are increasingly popular.