Hybrid Offers $55M for Bankrupt Fisker in Bid War
Hybrid Technology, led by Hong Kong billionaire Richard Li, has bid $55 million for Fisker Automotive's assets, just days after a bankruptcy judge in Delaware rejected Hybrid's plan to take over the failed electric-vehicle maker in a private sale.
Hybrid said in court papers Monday that it's offering $30 million in cash and would cancel $25 million in debt that Fisker owes Hybrid as its senior secured lender. Hybrid also promised that at least $5.5 million of the cash portion will go to Fisker's unsecured creditors if they switch to backing Hybrid instead of rival suitor Wanxiang Group as the so-called "stalking horse bidder" in the auction.
Hybrid also reversed its position on buying the former General Motors site in Wilmington, Del., where Fisker had planned to make cars. Previously it said it had no interest in building cars in the state, but Hybrid spokeswoman Megan Grant said in an email Monday that Hybrid plans to use the Delaware plant to "meet consumer demand and address market conditions."
Wanxiang has said it would continue developing and designing a second-generation line of Fisker vehicles, and make them at the shuttered GM plant once the cars were ready for mass production in large volumes. Gov. Jack Markell, whose administration provided $20 million in loans and grants to Fisker as an incentive to build cars in Delaware, has supported efforts that might lead to vehicle production resuming at the plant. A Markell spokeswoman had no immediate comment on Hybrid's latest proposal.
California-based Fisker filed for bankruptcy protection in November. The move came after the company drew $192 million on the Obama administration's $529 million green-energy loan before DOE officials suspended funding in 2011. Federal officials suspended the loans after Fisker failed to meet several sales and production milestones for its $100,000 Karma luxury car. The Karma's problems included vehicle fires and recalls, problems with battery packs, the bankruptcy of Fisker's primary battery supplier A123 Systems, and inventory losses from Superstorm Sandy, which destroyed hundreds of vehicles at a port in New Jersey.
Hybrid recently paid $25 million for the DOE's outstanding loan to Fisker, which resulted in a loss to U.S. taxpayers of $139 million. Hybrid is still looking to recover the remaining loan and, as new senior secured lender, had wanted to take control of Fisker. Unsecured creditors balked and threw their support toward Chinese auto parts conglomerate Wanxiang Group Corp., who offered $35.7 million in cash as the starting bid in a competitive auction.
On Friday, U.S. Bankruptcy Judge Kevin Gross ordered that Fisker assets be sold at auction and capped Hybrid's credit bid ability at $25 million. Hybrid said Monday in court documents that it is prepared to fight that decision.
"Hybrid believes that the ruling was erroneous, intends to seek appellate review or other relief as promptly as practicable, and expressly reserves all of its rights in that regard," attorneys for the company wrote in the filing.
Attorneys for the creditors committee did not immediately respond to messages seeking comment Monday. Parties are preparing for an afternoon hearing during which Judge Gross will consider a potential sale date and bid procedures, and Wanxiang's request to supplant Hybrid as Fisker's bankruptcy lender.
Wanxiang recently purchased Fisker's former battery supplier, A123, which is now known as B456 Systems Inc.