Electric Vehicle Manufacturer Fisker Halts Production, Raises Possibility of Bankruptcy Proceedings

Electric Vehicle Manufacturer Fisker Halts Production, Raises Possibility of Bankruptcy Proceedings

(Bloomberg) — Fisker Inc. is suspending production for the next six weeks as the electric vehicle maker seeks to get its inventory under control and avoid potentially having to file for bankruptcy.

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The company failed to make required interest payments of about $8.4 million last week on its unsecured convertible notes due 2026, according to a regulatory filing Monday. Fisker warned that it may not be able to meet its debt service obligations and “may need to seek protection under applicable bankruptcy laws.”

Fisker shares fell as much as 14% shortly after regular trading began. The stock fell 90% this year through last week’s close.

Fisker also announced Monday that it plans to raise up to $150 million through a financing agreement with the holder of its convertible notes dated 2025. The Los Angeles-based electric vehicle maker did not identify the existing investor and said the financing would be organized in four tranches and subject to certain conditions.

The revelations highlight the dire situation for Fisker, which warned late last month that there was substantial doubt about its ability to remain in business. The company announced it would cut 15% of its workforce after grappling with production problems, software glitches and criticism from short sellers.

Fisker said it remains in negotiations with an unidentified major automaker about a potential investment and joint development partnership. Bloomberg reported earlier this month that the company was in talks with Japan’s Nissan Motor Co., citing people familiar with the matter.

In its statement, Fisker said it has approximately 4,700 vehicles worth more than $200 million in inventory. It is suspending production in Graz, Austria, starting this week to sell off its stock of already-built electric vehicles.

(Updates with stock trading in last paragraph)

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