FX168 Financial News Agency (North America) News Cash-strapped Fisker's FSR-N talks with a major automaker over a potential deal have broken down, with the New York Stock Exchange planning to list the electric vehicle startup's shares due to "unusually low" price levels. Stocks are delisted.
The New York Stock Exchange said on Monday (March 25) that it had suspended trading in the stock several hours after it was suspended pending an announcement. Fisker shares were trading at $0.09 before the suspension, compared with Friday's closing price of $0.13.
Negotiations with the unnamed automaker have ended, the startup said on Monday, leading Fisker to explore strategic options, including in- or out-of-court restructuring and capital markets transactions.
If the shares are delisted, the company will be required to repurchase its unsecured 2.50% convertible notes due 2026 and will trigger an event of default on its senior secured convertible notes due 2025.
"We currently do not have sufficient cash reserves or financing sources to satisfy all amounts due under the 2026 Notes or the 2025 Notes, and accordingly, such an event could have a material adverse effect on our business, results of operations and financial condition," Fisker said. ."
The news comes a week after the company suspended electric vehicle production, adding to uncertainty about its future.
"I can't say whether it's next week or next year, but it's inevitable," Thomas Hayes, chairman of hedge fund Great Hill Capital, said of the growing possibility of Fisker filing for bankruptcy protection.
A potential bankruptcy would make Fisker Henrik Fisker's second failed automotive startup. Henrik Fisker began his career as an automotive designer and as a consultant to Tesla.
His previous effort, Isker Automotive, suffered losses in the 2008 financial crisis and filed for bankruptcy in 2013 despite receiving a $192 million loan from the Department of Energy.
Fisker's latest venture, formed in 2016, went public through a merger with a blank-check company and was valued at $2.9 billion.
But a series of supply chain issues, production delays and financing obstacles caused its market value to fall to less than $100 million.
Reuters reported earlier this month that Japanese automaker Nissan was in advanced talks to invest in the startup.
Fisker said earlier Monday that it would not be able to meet closing conditions to raise up to $150 million through the sale of convertible notes after missing interest payments.
The $8.4 million tranche of notes due in 2026 was supposed to be paid on March 15, but the startup said it was not paid despite having sufficient liquidity because it wanted to take advantage of a 30-day grace period with investments. discuss its capital structure.
Raising capital has been difficult for loss-making electric vehicle startups as they struggle to ramp up production and serve customers amid fierce competition and a tough economy, leaving little revenue.
Separately, Fisker said it will ask investors to vote on the reverse stock split proposal at its April 24 shareholder meeting as the company looks to comply with New York Stock Exchange listing rules.
Fisker's shares have fallen more than 90% this year after the startup raised going concern risks in February and suspended investments in future projects until it secured a partnership.
With less than half the number of vehicles delivered in 2023 due to logistical issues, the company moved to a dealer partner model earlier this year.
Fisker has adopted a different strategy than Tesla and other electric vehicle startups, relying on auto supplier Magna to assemble vehicles rather than investing in building and operating its own factories.
(Source: Autonews)
Fisker Ocean competes with Tesla's Model Y SUV and a growing number of mid-size electric SUVs such as the Ford Mustang Mach-E.