EV startup Fisker pauses production, raises funds
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The news: Electric vehicle maker Fisker will pause production for six weeks and warned it may seek bankruptcy, after the company missed an interest payment last week.
The numbers: Shares in Fisker have fallen 90% this year through to last week’s close, falling over 12.5% during trading on Monday.
The context: In an SEC filing Fisker explained that the company failed to make a required USD8.4 million ($12.8 million) interest payment on certain bonds last week, and that it would take advantage of a 30-day grace period to make that payment.
The company raised doubt about its ability to proceed as a going concern, and that should it fail to raise sufficient capital it may not be able “to satisfy our debt service obligations and could need to seek protection under applicable bankruptcy laws. There can be no assurance that we will be able to raise the capital we need to continue our operations.”
The filing says that Fisker has secured USD150 million in financing through the sale of USD166.7 million worth of notes to an existing investor at a 10% discount. The filing did not disclose the name of the investor. Fisker added that it is continuing talks with a large automaker for a potential investment and joint development partnership.
The company first warned there was substantial doubt about its ability to remain in business last month, and has 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, Wall Street Journal
