The sale of electric car company Fisker is turning out to be quite a soap opera. A decision by US Bankruptcy Court has put the remains of the company up for public auction. A late bid by Wanxiang, China’s largest auto parts manufacturer has reopened the bidding on Fisker’s DOE loan debt. Although it looked like Hybrid Technology Holdings (HTH), an investor group led by Hong Kong tycoon Richard Li was set to take control of Fisker’s remaining assests, the late bid from Wanxiang has scuttled the deal.
Wanxiang lost the original round of bidding to HTH. Wanxiang also owns A123 Systems, Fisker’s battery supplier. Their new more attractive bid includes the possibility of restarting Karma production. The plan is to build the Fisker at the Valmet Automotive in Finland. Eventually Fisker would be built in Delaware which would involve the re-opening of an old GM plant in that state.
To add to the intrigue, Fisker had originally asked the bankruptcy Judge Gross to accept Li’s bid, claiming Wanxiang was trying to profit from a bankruptcy it caused. Fisker claims Wanxiang contributed to the company’s bankruptcy by cutting off the supply of batteries from A123 and forcing a halt to production. Other factors that sunk Fisker included safety recalls and shipments lost to Hurricane Sandy.
In response to the Wanxiang bid, HTH is challenging the bankruptcy judge’s ruling. The company announced that it will utilize Fisker’s former General Motors assembly plant near Wilmington, Delaware. It will also with increase its bid from $25 million to $56 million which will include $30 million in cash. Wanxiang’s bid is about $36 million in cash plus equity in the new company.
Whoever wins, the money will go to the US Department of Energy to pay off a portion of Fisker’s outstanding $168 million low-interest loan.
Fisker will hold a Feb. 12 auction to determine the highest and best offer for its assets. Potential buyers must submit bids by Feb. 7 to take part in the auction. A hearing to approve the sale to the auction winner is scheduled for Feb. 14.
© 2014, Richard Matthews. All rights reserved.