With fresh financing near to replace an investment from a convicted swindler, Proterra is eager to restore its financial credibility and get about building and selling its innovative battery-powered buses.

Proterra, which is based in Golden, Colo., but builds buses in Greenville, got caught up, innocently by all accounts, in a funding miasma that put it on the brink of insolvency caused by the ill-gotten gains of its major investor and minority owner.

In March, the investor, Francisco Illarramendi, who owned MK Energy and Infrastructure, pled guilty in federal court to raiding pension funds of the Venezuelan state-run oil company in a Ponzi scheme involving hundreds of millions of dollars, prosecutors say.

The court’s receiver had seized MK, along with several other Illarramendi companies, and sought return of the $15 million the company loaned and the $5.4 million it invested in Proterra, which made MK a 4.4 percent owner.

After a four-month scramble to raise cash, late last week a syndicate led by Silicon Valley investors signed a term sheet agreeing to an equity investment of $30 million. Neither the identities of the investors nor the share of Proterra they will acquire was disclosed.

As part of that commitment, the receiver agreed to accept less than the $20.4 million MK put into Proterra. The company said it could not disclose the payback amount until the refinancing transaction closes in June.

Proterra said once the transaction closes and the “money is the bank,” the company can catch up with overdue payments to suppliers and step up production that slowed but did not stop in January. In the meantime, bridge loans are used to make payroll and “keep the lights on.”

“We are really excited about the partners we brought to the table and what it means for the business and for South Carolina to get back on track and start production,” said Jeff Granato, president and chief executive officer of Proterra.

The workforce is down to 85 from 130 last year.  All of those let go were temporary workers, Granato said.  There were no layoffs of permanent workers, and hiring will pick up once the new capital is in hand, expected new orders are signed and critical federal testing is completed, he said.

Uncertainties remain, particularly with the public money committed to bring Proterra to Greenville, the federal program to subsidize bus purchases and the planned $33 million plant on the campus of Clemson University’s International Center for Automotive Research.

According to the South Carolina Policy Council, Proterra will receive “as much as $40 million in corporate income tax credits, job development credits, grants, low-interest bonds and forgivable loans” over 10 years for picking Greenville as the site for its manufacturing plant.

When Proterra selected South Carolina after narrowing some 30 site locations to Greenville and one in Ohio, the company promised an investment of $68 million and 1,300 jobs within seven years in return for taxpayer incentives.

Because some of the conditions connected to incentives will not be met, Proterra will need to renegotiate with the city, county and state, Granato said.

“I would hope and expect that they would at least be open to entertaining a change in the terms we originally agreed to.”

Granato said plans for the ICAR plant are on hold until it is determined if the new investors support it and, if they do, whether “the lending institutions we have been working with previously see us as back on our feet and able to support  ... the real estate loans to get the building done.

“I would expect that there would be a little bit of time that would be required to make certain that the enterprise is in fact stable and able to support that kind of debt.”

He said the new investment “very explicitly is capital for the business” and cannot be used to construct the building.

In any case, Granato said, the company will not meet the original timetable of breaking ground in July  and “likely we will need to extend the lease” on the 90,000 square feet of the old Orders Distributing building on Whitlee Court off Interstate 85 and Laurens Road. The lease expires in June.

The City of Greenville paid the first year’s rent of $271,350 to give Proterra a temporary home until the ICAR facility was built. Granato said Proterra does not yet have a definitive agreement with the city to either extend the lease or the free rent.

A potential problem is in Washington, where budget-cutters could reduce or kill the federal program that subsidizes purchases of Proterra’s energy-saving buses by transit authorities. The government pays 80 percent of the cost of a bus.

The program, a green-energy initiative of the Obama administration, survived the most recent round of cuts, and “so far everything looks positive” for continued support, Granato said.  Still, he said, Proterra needs to “make sure we have enough capital to weather any slow down if it occurs.”

As a demonstration of the viability of the company, Proterra sent its EcoRide battery-powered bus to the Altoona Bus Research and Testing Center at Penn State University for testing against strict federal standards for safety, durability and energy efficiency.

When the testing is complete, Granato said, the Federal Transit Administration will issue a report that will serve “almost like a consumer report” for purchasers.  “It’s not pass-fail.”

“This is a report to transit providers that if you are going to buy this bus, you’ll have all the information you need about how it is going to perform and what the maintenance is going to look like over the course of its operation.”

In initial in-service experience, early versions of Proterra’s battery-charged bus recorded 17-27 miles per equivalent diesel gallon, and Granato said he expects the later model sent to Altoona will average between 24 and 27.  The typical diesel-powered bus gets about six miles per gallon.

Granato said production will pick up “not so much because of the investment capital coming in but as a result of the Altoona test being completed and the report being available to transit agencies for support to put buses on the street.”

He expects the testing to be complete in four to six months.

Several buses have been sold or are in operation under waivers from the FTA, and Proterra has five more near ready to be turned over to buyers.  Three have been purchased by San Antonio, Texas, one by General Electric and one for use at the Fort Lewis Army Depot in Washington.