Automotive News Europe — 2024-03-18
Automotive Industry
Company halting production for 6 weeks, misses required interest payment of about $8.4 m last week (March 2024).
Fisker is pausing production for the next six weeks as the electric-vehicle maker looks to rein in inventory and avoid possibly having to file for bankruptcy.
The company didn’t make a required interest payment of about $8.4 m during the second week of March 2024 on its unsecured convertible notes due in 2026, according to a regulatory filing Monday, 18 March 2024. Fisker warned it may not be able to meet obligations to service its debt and “could need to seek protection under applicable bankruptcy laws.”
Fisker also said Monday, 18 March 2024, that it plans to raise up to $150 m through a financing deal reached with the holder of its 2025-dated convertible notes. It didn’t identify the existing investor and said the funding will be organized in four installments.
Fisker builds its electric Ocean crossover under contract with assembler Magna Steyr in Graz, Austria. There was no immediate comment from a spokeswoman for Canada-based parent Magna International.
The disclosures underscore the dire circumstances for Fisker after it said late February 2024 that there was substantial doubt about its ability to stay in business. The company said on 29 February 2024 it would cut 15% of its workforce and has struggled with production issues, technical glitches and criticism from short sellers.
Fisker said it remains in negotiations with “a large automaker” about a potential investment and joint development partnership. Bloomberg and Reuters reported earlier in March 2024 that the company was in talks with Japan’s Nissan, citing people familiar with the matter.
In its statement, Fisker said it has about 4,700 vehicles in inventory worth more than $200 m. It’s pausing production starting this third week of March 2024 to sell down its supply of already-built EVs.