Fisker’s assets were sold for $149 million to Wanxiang

Posted Feb 16, 2014

Wanxiang, a Chinese parts maker, has acquired Fisker’s assets for $149 million. Fisker Automotive went bankrupt in the summer of 2012. Fisker’s assets were sold to Wanxiang at the close of an auction in a Delaware bankruptcy court that lasted over two days across 19 rounds.

Wanxiang paid a total of $149.2 million for the company, which is six times the price of $25 million that was first offered by unsuccessful bidder Hybrid Tech Holdings. The opening bid was $55 million when the auction started. Wanxiang is the largest auto parts company in China. Wanxiang also owns A123 Systems, the lithium-ion cell maker that built batteries used in the Fisker Karma sedan.

Hybrid Tech sought to buy Fisker assets privately when the auto company filed for bankruptcy in November. When Wanxiang stepped in with a late bid, Hybrid Tech raised its bid to $55 million. Hybrid and Fisker were hoping to avoid an auction, but U.S. Bankruptcy Court Judge Kevin Gross ended up putting those assets up for open public auction.

Fisker Automotive built around 2,500 Fisker Karmas before halting production in July 2012 after there was a recall of defective cells by A123 four months earlier. A123 declared bankruptcy in October 2012 and Wanxiang purchased that company’s assets in January 2013. Judge Gross still has to approve the Wanxiang sale.

The price of nearly $150 million almost approaches the outstanding Department of Energy loan balance of $168 million, but it does not seem like the Department of Energy will see any of this money. The loan was sold to Hybrid Tech Holdings, which is the Hong Kong based company run by Richard Li, an early investor at Fisker Automotive.

Judge Gross ruled that Hybrid Tech can recoup $25 million from the sales proceeds. The $25 million is what Hybrid Tech paid for the sales proceeds. The sales proceeds will be used to pay off Fisker’s other unsecured creditors.

Here is a statement that Hybrid Tech sent out after the auction:

After actively bidding in the auction, Hybrid has elected to retain its rights as a lender rather than continue to bid for ownership of Fisker.

Hybrid acquired the Department of Energy?s secured loan of US$168 million in November 2013, and is the senior secured creditor of Fisker. After repayment of its debtor-in-possession financing and certain other costs incurred as part of the bankruptcy proceedings, Hybrid is entitled to be repaid ahead of the unsecured creditors on account of its security and, in relation to any assets that are ultimately determined to be unencumbered, will share in those assets together with all other creditors.

Hybrid will consider taking all necessary steps and appropriate measures to protect its interests in this matter, and remains committed to exploring other long term investment opportunities in the United States.

Wanxiang plans to use Fisker’s assembly plant near Wilmington, Delaware for future plugin car production. Last month, U.S. Energy Secretary Ernest Moniz said that the winning bidder for Fisker’s assets would keep development and assembly in the U.S. Fisker acquired the Delaware plant for $20 million in 2010, but it was empty since then. Wanxiang has not developed and sold entire vehicles yet. The company has built parts and subassemblies.

[Source: GreenCarReports]