Fisker Automotive, Inc. and Fisker Automotive Holdings, Inc. have entered into a deal with Hybrid Tech Holdings, LLC for the sale of substantially all assets. Click here for previous Business Daily stories on Fisker
Hybrid is the lender under an approximately $170 million loan secured by first liens on substantially all of Fisker Automotive’s assets. Hybrid’s parent, Hybrid Technology, purchased the loan from the U.S. Department of Energy during an auction.
U.S. taxpayers lost about $139 million on the loan, Bloomberg reported. Assets purchased by Hybrid, according to Bloomberg, include the former GM Boxwood plant in the Newport area. Delaware also had a loan and grant of nearly $20 million related to the project.
“No one is happy with the now-unsurprising news that Fisker is reorganizing in bankruptcy, particularly the many Delawareans who would like to get back to building world-class cars at Boxwood Road,” said Gov. Jack Markell “But our focus today remains the same – securing a future for the Boxwood Road facility and good jobs for people who want to work there.”
In a related move, Fisker Automotive filed a Chapter 11 Bankruptcy petition. Hybrid Technology has committed up to approximately $8 million in debtor-in-possession (DIP) financing to fund the sale and Chapter 11 process.
“When the plant closed, the governor told the autoworkers and their families that we were not going to give up on them,” said DEDO Director Alan Levin. “With over a billion dollars in private sector support and a half billion dollar federal loan, Fisker was the best chance to restore those manufacturing jobs. That did not come to pass, but we are going to keep working to build a new future for this facility. If there is some chance that the reorganized company will manufacture in the U.S., we will do our best to convince them do it here.”
The Delaware Economic Development Office has retained the law firm of Duane Morris LLP to assist the state in the bankruptcy process.
“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,” said Marc Beilinson, Fisker Automotive’s chief restructuring officer. “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.”
Fisker was essentially shut down earlier this year and apparently held off on the bankruptcy filing pending the auction of the federal loan.
Hybrid is believed to be under the control of Richard Li of Hong Kong, son of Asia’s richest man, the Los Angeles.
The Times reported the U.S. Government has a commitment from Hybrid Technology to move the restart of Fisker Karma production to the U.S. from Finland and keep Fisker’s design and engineering in California.
The Delaware plant was to be the location for the production of the mid-sized Fisker Atlantic.
Fisker ran into a host of problems that included engine fires and the bankruptcy of its auto suppliers. It burned through the more than $1 billion in funds.
In 2010, the Delaware Economic Development Authority (DEDA) and Council on Development Finance (CDF) approved a loan of $12.5 million to Fisker.
The loan required Fisker to spend at least $125 million in capital investment at Boxwood Road and it was convertible to a grant depending on the employment levels at the facility. The state also approved a grant of up to $9 million to Fisker to offset utility costs at Boxwood Road. A total of $7.5 million of that grant has been spent.
The federal government suspended its $528.7 million loan, with $359 million to b e used to refit manufacturing at the Boxwood Road plant. The loan was announced with great fanfare in late 2009 with a ceremony at Boxwood.
With the major exception of Fisker, the federal loan program has been successful with major auto makers current on their loans and electric car maker Tesla paying of its loan early.
Click here for previous Business Daily stories on Fisker