Chinese Bidders Back Away From Fisker Automotive
A deal to sell a majority stake in Fisker Automotive by mid March to Zhejiang Geely Holding Group won’t happen now due to Fisker’s obligations to the U.S. government.
After that deal fell apart and was reported Monday, the Wall Street Journal subsequently reported last night a second Chinese bidder, Dongfeng Motor Corp. which had been competing with Geely, also backed away from Fisker.
According to an un-named source speaking to reporters, Geely, which owns Volvo of Sweden, said it won’t bid on Fisker because it looks too risky to get entangled in a company that previously struck deals to provide jobs in Delaware.
When Fisker accepted its initial $529 million Energy Department loan, the provisions of the deal said it must restore capacity on a schedule to be set by the U.S. government.
Originally, Fisker’s government loan was intended to let it assemble its Atlantic plug-in hybrid, and hire 2,500 workers.
Geely’s plans had reportedly included using the former Boxwood Road plant once owned by General Motors in Delaware as a base to also proliferate more Volvos.
Both Dongfeng and Geely, the WSJ reports, essentially wanted Fisker’s assets, but not its obligations to build Fiskers in Delaware, and other requirements it’s still on the hook for.
Presently, the under the federal Advanced Advanced Technology Vehicle Manufacturing loan agreement, if Fisker defaulted or bankrupted, the government would gain essential control of the company. Fisker accepted $192 million from its Energy Department loan before the loan was cut off February 2012.
Fisker Spokesman Russell Datz said the company is “still talking with several parties” while declining to share further details.