Fisker goes to the highest bidder, future in Delaware still unclear
A U.S. Bankruptcy Court Judge today approved the sale of luxury car manufacturer Fisker Automotive to Wanxiang America Corporation.
Wanxiang successfully outbid competitor Hybrid Technologies LLC in the final amount of $149.2 million during an auction of Fisker’s assets. Bidding started at $59 million.
According to Fisker attorneys, a total of 19 rounds of bids were submitted between the two companies over a three-day period.
As part of the sale agreement, Wanxiang will acquire all of Fisker’s assets including the Boxwood Road plant in Newport, Delaware.
Attorneys for Wanxiang couldn’t say what the company plans to do with the plant but did disclose that the company will pay the outstanding property and school taxes of $1.1 million to New Castle County at closing.
In a Wanxiang business proposal outlined last month, the company expressed interest in opening the Delaware plant to manufacturer the second generation of Fisker vehicles.
The 3.5 million square foot building is a former General Motors plant and was acquired by Fisker in 2009 to be the company’s major North American manufacturing hub.
“We are glad that the auction for Fisker’s assets attracted two well-respected companies interested in making Fisker automobiles, and we congratulate Wanxiang America Inc. on its winning bid," said Alan Levin, director of the Delaware Economic Development Office. "Wanxiang is well-respected as the largest automotive parts manufacturer in China and it has a history of operating numerous plants across the United States. While nothing is final until approved by the court, DEDO will continue to talk with Wanxiang about its plans for Fisker and advocate for making the Boxwood Road facility an important part of the company’s future.”
Splitting the Pie
While Judge Kevin Gross approved the sale, the legal process is far from over.
The company still has to settle any outstanding objections and figure out how the sale money will be divided among creditors.
One of the largest creditors is Hybrid Technologies since the company purchased Fisker’s Department of Energy Loan last year.
The state of Delaware is among the thousands of creditor’s owed money from Fisker as it invested nearly $20 million in loans and incentives to bring the car manufacturer to the First State.
Sunni Bevel, an attorney who represents the official unsecured creditors committee, said they’ll work to divide the sale money in order to recover as much as possible for the unsecured creditors.
“We think that there is a strong argument that the unsecured creditors should get a significant portion of that,” said Bevel. “It’s certainly not all Hybrids.
Fisker had secured more than a billion dollars between private investments and state and federal loans before the company began falling apart.
Fisker blamed the bankruptcy on a number of issues including supply chain disruptions, design delays and the inability to access additional or incremental liquidity. They also claim sales were affected by negative press after the company was forced to recall batteries after cars began catching on fire.
Fisker also claims to have suffered a multimillion dollar loss when 339 Karmas were destroyed in Hurricane Sandy.