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Fisker Automotive Inc. Closing in on Bankruptcy
The manufacturer of plug-in hybrid sports cars, Fisker Automotive Inc., is preparing to file for bankruptcy protection, according to The Wall Street Journal. The group is based in Anaheim, California and it could file for protection within the next week, according to sources close to the situation.
Of the company’s 200 remaining employees, 150 were dismissed last week in an effort to conserve cash after discussions of a possible sale with two Chinese auto makers fell through. Fisker is still talking about a sale with the companies, which are Zhejiang Geely Holding Group and Dongfeng Motor Group Co.
There is an April 22 deadline for Fisker to make a loan payment to the United States Department of Energy. Under the department’s Advanced Technology Vehicles Manufacturing Loan Program, the company is roughly $192 million in debt.
Should the company enter bankruptcy, the DOE would be the senior creditor of Fisker and would have a huge say in the sales process or financial restructuring of the company.
The first plug-in hybrid Karma model hit the market in late 2011. The company’s problems began well before the first vehicle hit the streets, when the government declined to give the company a $529 million loan package after it fell behind on financial benchmarks for a second plug-in hybrid car.
The company has not produced a car since July. Fisker’s battery supplier, A123 Systems Inc. filed for bankruptcy protection and was bought by Wanxiang Group Inc.Fisker Automotive Inc. Closing in on Bankruptcy by Jim Vassallo