Fisker Automotive Files For Chapter 11 Bankruptcy
Fisker Automotive has filed for Chapter 11 bankruptcy protection on Friday as part of a restructuring plan. Hybrid Tech Holdings LLC is buying Fisker’s assets and will provide $8 million in debtor-in-possession financing for funding the sale and restructuring.
The U.S. Department of Energy sold its green technology loan in Fisker to Hybrid Tech for $25 million. Hybrid Tech bought one loan extended by the U.S. Department of Energy, which was originally worth $168 million. The Department of Energy recouped around $53 million of their $192 million investment in Fisker Automotive.
“After having evaluated and pursued all other alternatives, we believe the sale to Hybrid and the related Chapter 11 process is the best alternative for maximizing Fisker Automotive’s value for the benefit of all stakeholders,” stated Fisker Automotive chief restructuring officer Marc Beilinson. “We believe that the Fisker Automotive technology and product development capability will remain a guiding force in the evolution of the automotive industry under Hybrid’s leadership.”
Hybrid Tech said that the purchase of the government loan would be the first step towards restarting production and sales of the Karma vehicle. Fisker has not built a Karma since 18 months ago. The Karma received positive reviews, but it had many quality problems that hurt their image and affected their cash-flow.
Fisker Automotive fired most of their staff to save cash this past April. Fisker was unable to repay millions of dollars in outstanding bills to suppliers. The Energy Department put the loan up for auction in the middle of October. Fisker Automotive won a $529 million line of credit in 2009 as part of the Obama’s administration to ramp up advanced vehicle development in the U.S. The Energy Department put Fisker’s credit line on hold in the middle of 2011.
[Source: Auto News]