Fisker says it will have to file for bankruptcy within 30 days if it doesn’t get debt relief in the U.S.
April 24, 2024 at 14:06
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- Fisker missed a required interest payment worth $8.4 million, and says it is running low on cash.
- The company added that if it does not get debt relief, it may have to file for bankruptcy in the next 30 days.
- The EV startup has hired a chief restructuring officer as it looks ahead at a grim future.
Fisker’s prospects for the year are grim, with the possibility looming that the company may not survive beyond 2025. According to documents filed with the SEC, the automaker discloses its dwindling cash reserves and the appointment of a chief restructuring officer.
In its annual 10-K form, Fisker reported that it has missed a required interest payment worth $8.4 million. The automaker also wrote that it does not believe it has enough cash to meet its current obligations for the next 12 months. Therefore, there is “substantial doubt about its ability to continue as a going concern.”
Read: Fisker Dealers Remain Hopeful Despite Brand’s NYSE Delisting
“If [Fisker] does not receive adequate relief from its debt holders and additional sufficient liquidity from potential liquidity providers to meet its current obligations, it expects to seek protection under applicable bankruptcy laws in multiple jurisdictions within 30 days from the issuance of these financial statements,” the company wrote in its filing.
To navigate this challenging situation, Fisker has enlisted the expertise of a “chief restructuring officer,” as reported in a separate 8-K filing with the SEC. Michael Healy, a senior managing director at FTI Consulting, will assume the role.
“Mr. Healy specializes in restructuring and reorganizations,” Fisker wrote. “Mr. Healy has extensive experience which includes advising companies, creditors, shareholders and other interested parties on restructuring transactions both in Chapter 11 and in non-bankruptcy driven resolutions.”
The moves follow Fisker’s tough start to the year. Although the automaker started delivering its first EV, the Ocean, to customers last year, a slew of bad reviews and complaints of defects marred the SUV’s launch.
At the same time, Fisker’s share price began plummeting, leading to its delisting from the New York Stock Exchange earlier this month. Despite efforts to attract investors and secure a financial lifeline, the company faced mounting financial woes. With bankruptcy proceedings looming on the horizon, options for the automaker seem increasingly limited.
