California-Based EV Start-Up Fisker Prepares For Possible Bankruptcy Filing: Report

The company was facing tough times on the financial front and had delayed the release of its full financial results for last year.
Electric Vehicles
Electric Vehicles

California-based electric-vehicle start-up Fisker has hired  restructuring advisers amid concerns of potential bankruptcy, according to a report published by news website Mint. 

Fisker, facing cash depletion, has engaged financial adviser FTI Consulting and law firm Davis Polk to explore options. The company, with $273 million in sales and over $1 billion in debt, issued a "going-concern" warning last month, expressing doubts about its viability. Negotiations for additional funding and a new U.S. manufacturing partner are underway.   

Fisker and FTI Consulting declined to comment, while  law firm Davis Polk didn’t respond on the matter, the report added.  

The company was facing tough times on the financial front and had delayed the release of its full financial results for last year. The company cited the insufficient number of accounting professionals in its regulatory filing.  

Once a well-known company in EV market Fisker went public in early months of 2010.  

Fisker introduced its initial vehicles to U.S. consumers in June amidst concerning signs of slowing sales growth. The company adjusted its demand projections twice in the past year and reduced prices due to "competitive realities."  

If the company seek bankruptcy protection, it would mark the second collapse of an automotive venture founded by former BMW and Aston Martin designer Henrik Fisker. The first, Fisker Automotive, filed for bankruptcy in 2013.   

Since its 2020 public debut via a merger with a special-purpose vehicle, Fisker's share price has plummeted over 97 per cent to 32 cents as of Wednesday's close. Persistently trading below $1, the company's shares face delisting from the New York Stock Exchange. 

The report further added last month the company disclosed that it fell short of its production target, manufacturing slightly over 10,000 vehicles compared to the goal of at least 13,000 units. Approximately 4,900 vehicles were delivered to customers.   

Executives attribute sluggish sales growth partially to the complexities of the direct-sales system.   

Efforts are underway to sell nearly 5,000 vehicles in stock, valued at approximately $500 million, by the end of March, including through the addition of new franchise dealerships.   

Meanwhile, it is in talks with a ‘Large carmaker’ regarding potential investment and a joint manufacturing agreement, enabling production of new vehicles in the U.S.

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