Positive and Negative Reports Obscure Fisker Money Issues
Reports swirling around Fisker Automotive are ranging the gamut from the company is possibly on its way to insolvency to its future is bright and concerns about whether it can renegotiate its U.S. Department of Energy loan balance are unfounded.
On the negative end of the spectrum, an analyst initially quoted by the Boston Globe – and since re-reported by a number of sources – has said Fisker and its battery supplier A123 Systems will be going down.
Since reports also began that Fisker would reduce production, A123 cut its revenue forecast by 20 percent, and since July it has reduced its workforce by 300 employees.
Citing political winds blowing against green energy loans, the analyst said chances are low the DOE will fork over $336 million remaining from a $529 million loan for which Fisker failed to qualify after missing Karma production deadlines.
Earlier this month, when it was reported Fisker is renegotiating the government loan terms, and it cut 66 workers from it its Anaheim, Calif. headquarters and Wilmington, Del. assembly plant, the company said it was not worried.
On Feb. 7, Fisker spokesman Roger Ormisher said to us – as he had also to the Wall Street Journal – that the DOE snafu was only “a bump in the road.” Further, he said the DOE money is earmarked for 2013 Project Nina vehicles to be produced at Fisker’s refurbished former GM plant in Delaware, and is not preventing existing Finnish-made Karma sales.
Adding now to Ormisher’s mostly positive outlook is an Automotive News report of Fisker founder Henrik Fisker who reiterated his company may not need the DOE funds.
“We are in discussions for alternative financing,” Henrik Fisker said. “We don’t want our future 100 percent reliant on DOE funding. It’s been great to have. We just want to be sure we have capital without DOE.”
So despite reports that the vultures are circling, Fisker Automotive has consistently said it has options, and it is not even close to failing. Similarly, A123 has not said it is in danger of failing either.
Fisker reportedly raised $260 million in its latest round of private fund raising, and has raised in excess of $850 million in total, but there may be trouble on this front as well.
According to the Orange County Register, investor Daniel Wray is suing Fisker for fraud. Wray reportedly invested $210,000 in Fisker but the company allegedly demanded another $84,000 or he’d lose the rights he gained from the original stock purchase.
What the whole story will turn out to be thus remains to be seen. In short Fisker does have money problems, but whether they are severe or just one more in a long series of hurdles it has jumped through, over and around, is yet to be determined.