EV startup Fisker enters trading halt as rescue talks with automaker collapse
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The news: Beleaguered electric vehicle maker, Fisker, entered a trading halt on Monday after the company announced that its talks with a large automaker for a potential deal have collapsed.
The numbers: Shares in Fisker plunged almost 30% during early trading on Monday.
The context: Early last week, Fisker paused production and announced that it had secured USD150 million ($229 million) in financing from an existing investor on the condition that it could reach an agreement with an unidentified automaker. Without this agreement Fisker will need to renegotiate the terms of the financing or seek other avenues.
An SEC filing submitted by Fisker on Monday explains that the automaker terminated the negotiations, and that it will seek alternative measures which may include bankruptcy. “These alternatives involve significant uncertainties, potential significant delays, costs and other risks, and there can be no assurance that any of these alternatives will be available on acceptable terms, or at all, in the current market environment or in the foreseeable future,” the filing states.
The company first warned there was substantial doubt about its ability to remain in business in February, and hired restructuring advisors to assist with a potential bankruptcy filing. The California based startup has borne the brunt of a major global slowdown in EV demand, and was left with 5,000 unsold vehicles at the end of 2023.
The sources: Fisker SEC filing, Capital Brief
