Fisker faces bankruptcy as OEM investor pulls out

Start-up previously warned it would abandon production plans if OEM collaboration fell through

Fisker faces bankruptcy as OEM investor pulls out
Fisker issued a 'going concern' notice earlier this month

California EV start-up Fisker looks in ever-growing danger of going bust after negotiations for a collaboration with a prospective OEM partner fell through.

Earlier this month Fisker warned investors that its ability to continue operating likely hinged on the completion of the collaboration – widely rumoured to be with Japan's Nissan.

Last week Fisker received notice from the large automaker that it had terminated the negotiations, Fisker said in a SEC filing on Monday.

The deal was set to involve significant funding for Fisker's beleaguered balance sheet as well as the joint manufacturing of a new EV.

"Following [the] termination, the company continues to evaluate strategic alternatives. Such alternatives may include in or out of court restructurings, capital markets transactions, repurchases, redemptions, exchanges or other re-financings of its existing debt, the potential issuance of equity securities, the potential sale of assets and businesses," the filing continues.

As a result, the company says it will now not be able to meet a closing condition relating to funding it raised earlier this month.

The SEC filing says Fisker is exploring options with the debtor for waiving the requirements to make further interest payments, but says it cannot guarantee securing these terms.

Fisker may instead need to file for bankruptcy in the coming days, which would make it the second of eponymous CEO Henrik Fisker's automaking start-ups to go under, after hybrid sports car maker Fisker Automotive failed in 2012.

Crisis timeline

Fisker shares have fallen 95pc since the beginning of 2024, after it reported that it was struggling to make deliveries.

Accordingly, the OEM turned to a hybrid delivery model involving dealership sales, as well as direct sales, in early January.

In mid-February the automaker received a noncompliance notice from the New York Stock Exchange for failing to meet the minimum bid price of $1 per share for the company's stock.

On 1 March Fisker issued a 'going concern' warning to investors that it might be unable to continue operations. At that time, management said that Fisker would have to abandon product plans if the OEM collaboration did not go through.

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Bankruptcy fears set in further last week when Fisker suspended production to limit its rate of cash burn.

At the same time, however, the firm also announced it has raised a further $150mn in capital from an unnamed existing investor in the form of convertible notes. Fisker has now confirmed it is unable to make an interest payment on this debt and is exploring options to secure the funding from the investor in another way.

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