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Fisker may seek bankruptcy protection in 30 days if unable to meet debt obligations

Tan KW
Publish date: Wed, 24 Apr 2024, 01:05 PM
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Fisker may have to file for bankruptcy protection within 30 days if it does not get adequate relief from its creditors and enough liquidity to meet its current debt obligations, it disclosed in a regulatory filing on Tuesday.

The cash-strapped EV startup said it had failed to make an interest payment of about $8.4 million on some notes due in 2026 during a 30-day grace period.

The startup has been facing mounting uncertainty after talks with a large automaker for a potential investment collapsed last month, forcing it to look for options including in- or out-of-court restructurings and capital market transactions.

Fisker was also delisted by the New York Stock Exchange in March as its shares traded at "abnormally low" price levels.

Fisker said its cash balance reduced to $325.5 million in 2023 from $736.5 million in 2022. It also disclosed its headcount was about 1,135 employees as of April 19, down 425 employees from the end of December.

The EV startup said on Tuesday it plans to further reduce its workforce and streamline its operations, including reducing its physical footprint.

It had cut the prices of its 2023 Ocean SUV models in March to boost sales and raise capital to meet debt obligations.

The company, which warned of going-concern risks in February, has been grappling with intense competition, as well as customers holding back big-ticket purchases due to higher borrowing costs and economic uncertainty.

 


  - Reuters

 

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