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EG Group, the British petrol station company co-owned by the billionaire Issa brothers, has taken a $33mn hit on an investment in a Scottish hydrogen vehicle start-up that is now on the brink of insolvency.
EG, which is weighing a possible initial public offering in New York, disclosed it had taken the multimillion-dollar charge in financial statements shared with its lenders last week. EG “fully impaired” a loan to Hydrogen Vehicle Systems (HVS) at the end of 2024, according to the statements, citing an “increased credit risk” around the business.
The Glasgow-based start-up, in which EG previously invested a total of £30mn, has recently warned it is weeks away from insolvency. It has been trying to build hydrogen-powered heavy-goods vehicles.
EG, which is also co-owned by TDR Capital, first made a £5mn equity investment in HVS in 2021, before extending a £25mn convertible loan the following year. In its 2022 annual report, EG stated it was focused on the “potential for hydrogen to power light and heavy-duty vehicles” and cited its “strategic investment” in HVS as providing it with “unique insight into how that space is developing”.
In October, HVS was hit with a winding-up petition — a type of insolvency proceedings where a creditor requests a court to appoint liquidators — from one of its manufacturing partners.
In an open letter to potential investors sent on February 20, HVS’s chief scientific officer David Telford wrote that the company urgently needed to raise money as it “faces winding up in four weeks”, adding that £1mn “will buy time with creditors”.
Telford’s letter, which is primarily addressed to Barclays Climate Ventures, outlines that HVS is looking to raise £9mn to develop a new cruise-control system powered by artificial intelligence, which it claims will help reduce carbon emissions in the trucking industry.
HVS’s founder and chief executive Abdul Waheed has also recently attempted to solicit investment from Saudi Arabia on LinkedIn, posting a mock-up of a truck titled the “HVS ARAMCO VISION 2035” in response to a post about the state-owned oil company’s own hydrogen vehicle venture.
EG’s losses on its investment in HVS are the latest example of a large company losing money investing in the once-hyped hydrogen vehicle sector. Nikola, the US hydrogen-truck maker that drew investment from General Motors and was once valued at $30bn, filed for bankruptcy protection last month.
EG’s investment in HVS gave it a 31 per cent stake in the company, according to corporate filings, equal to the stakes held by Waheed and the company’s executive chair Jawad Kursheed.
EG Group declined to comment.
HVS said: “We continue to hold constructive discussions with third parties to explore options to raise further capital. This will help us drive forward our new, less-capital intensive strategy to license vehicle technology to existing truckmakers — and decarbonise transport.”
HVS added that it was “hopeful” that Barclays Climate Ventures would “help save HVS”, describing its business as a “natural fit” with the British bank’s £500mn climate technology fund.
Barclays, which has no existing investment in HVS, declined to comment.
EG’s examination of a potential stock market listing in New York comes after it disposed of its UK convenience stores and petrol forecourts, selling the bulk of them to the supermarket group Asda, a sister business also owned by TDR Capital and Mohsin Issa.
EG disclosed to lenders that it booked $24.2bn of total revenue in 2024, representing a 3.3 per cent decline on a like-for-like basis with the previous year. EG’s so-called underlying ebitda rose by 9 per cent year on year to $992mn.
