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I wish media had reported why Blusmart/Gensol’s recent deal with Refex was called off 3 days ago 🙏🙏 Almost a lakh Gensol public shareholders and the many bondholders of Blusmart deserve answers. While the company has not shared the reason for cancelling the deal, talking to a Blusmart bondholder gave me many insights. .. Let’s start with basics. - Gensol had borrowed money to buy and lease ~5.5k EVs to Blusmart at a mere 1% delta cost (I’d covered this in multiple deepdives in the past) - That brought sizeable revenues, but Gensol lost money on each car leased to Blusmart. Thus, now cash-strapped, Gensol cut out a deal to sell 3k cars and debt on them to Refex’s fleet operating arm called Refex eVeelz Deal was such that Refex would lease those 3k cars back to Blusmart. This would bring Gensol some cash, tone down its debt, and, ensure business as usual for Blusmart. .. Then, the shady activities between Gensol & Blusmart and within their operations all came out in the open. And as much as it pains me to type this out, nobody really knows now if Blusmart and Gensol will even exist someday. And if they do, at what size and scale will they operate? No one knows! In that context, Refex was in trouble. .. Why do I say that? - If Refex is to lease the 3k cars to an entity like Blusmart, who’s very future existence is now uncertain, that brings a massive risk - If Blusmart ends up unable to pay the money and is dragged to bankruptcy courts while having those cars, it could materially damage Refex’s own fortunes Refex’s ability to pay back the debt it would take to buy these cars from Gensol would be damaged. .. Thus, it’s obvious that Refex would want to be free from the compulsion to lease back the 3k cars to Blusmart. Refex wanted the freedom to choose who to lease those cars to or to maybe operate them directly under the Refex eVeelz brand. Towards this, Refex eVeelz even announced weeks ago that it would soon get 1k EVs listed on Uber. And this is what became a thorn. .. Gensol wanted the cars to be leased back to Blusmart when it should have prioritised the better interests of its own shareholders. Somehow, the founder’s interests in his privately owned Blusmart reigned supreme - without those 3k cars, Blusmart would shrink so dramatically that its ability to pay the bondholders would evaporate anyway. The result? Refex backed out, keeping its business safe from any casualties. And, I wish the media had reported this, cuz much of the loans Gensol has taken for those 3k cars (in fact, all 5.5k cars) is from PSUs like IREDA and REC. It’s public money that’s going to go nuke, if Gensol collapses. Did you know this?