Fisker could file for bankruptcy protection by mid-May

The struggling electric car manufacturer Fisker is facing bankruptcy within 30 days. The company warns of this in a notification to the US Securities and Exchange Commission. A necessary investor is still not in sight.

Fisker could not make an interest payment of 8.4 million dollars due on 15 March, and the 30-day grace period has now expired, the carmaker writes in the mandatory notification to the SEC. As a result, Fisker expects to apply for creditor protection within 30 days if it cannot raise additional capital.

“The Company has been seeking additional financing, attempting to restructure its current debt obligations and continues to discuss financing alternatives with potential providers. In addition to reducing expenses, the Company intends to further reduce its workforce and streamline its operations, including reducing its physical footprint”, Fisker writes in the stock exchange release.

At least in terms of job cuts, consequences are already visible. According to the latest document, the company still has 1,135 employees (on the reporting date of 19 April), which is 425 fewer than at the end of December.

In February, Fisker itself warned that it might not be able to continue operations. For US-listed companies, this is a mandatory announcement if the company’s cash reserves are not sufficient to finance business operations for a year. Therefore, such a warning does not necessarily result in insolvency, as there is still time to achieve a financial turnaround or find investors. Fisker also reported talks with a “major car manufacturer” about a financial investment and a model cooperation for electric pickups had failed. According to previous reports, the manufacturer in question was Nissan.

In mid-March, it also became known that production of the currently only Fisker model, the Ocean, had stopped. Production at the Magna plant in Graz, Austria, was officially suspended for six weeks “to align inventory levels”. As Fisker has massively reduced prices in the US and later also in Europe, there has already been speculation about the seriousness of the situation. Now that no financial backer has been found and instead, there is talk of a possible bankruptcy filing, it is currently more unclear than ever whether Ocean production will ever restart.

reuters.com, sec.gov (stock exchange release)