Written by Cláudio Afonso | [email protected] | LinkedIn | X
The EV startup founded by the renowned automotive designer Henrik Fisker is living in the most turbulent period of its short history as investors and customers wait for good news. As of the time of writing, Fisker shares are trading 10.23 percent higher at $0.611 per share.
Earlier today, the CEO emailed the staff for a new round of layoffs saying he is “continuing to evaluate all viable options for our business, including a potential transaction, and we are committed to identifying potential buyers and pathways to infuse capital into the business.”
“[I]t is with great personal pain and sadness that I deliver the difficult news that today we are making further reductions to our workforce (…) That said, we must preserve cash to help keep these options available to us,” Fisker CEO wrote in the email as reported by TechCrunch.
The founder and chief executive told staff last week that the company is in talks with four automakers for a possible buyout. However, if the agreements fail, Fisker may have to file for bankruptcy protection within 30 days.
According to the 8k filing filed last week, Fisker failed to pay the amount required for an installment payment of about $8.4 million on March 29. In simpler terms, the company missed a scheduled payment, which puts it in violation of the agreement it made when it issued those particular notes. The miss triggered the investor’s right to demand immediate redemption of their investment.
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However, instead of immediately enforcing this right, the investor has agreed to temporarily forbear from doing so, as well as from exercising any other default-related rights and remedies against the EV startup.
This forbearance period, where the investor refrains from taking action against Fisker, started on April 21 and will end this Wednesday, the first day of May. This agreement buys time for Fisker to address its default issues or negotiate a longer-term solution with the investor.
Shareholders and owners of Fisker‘s first electric vehicle Ocean are waiting for an official announcement of a buyout from another automaker which would allow the company to have enough liquidity to meet its current debt obligations.
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If none of the automakers agrees on a deal over the next few days, Fisker may seek to extend the forbearance period with the investor allowing the company to buy some more time.
Last week, Fisker published its annual report disclosing the delivery of over 6,400 Ocean SUVs since May 2023, when deliveries kicked off in Denmark.
Since the stock was delisted from the New York Stock Exchange, the share price tumbled to a new low of $0.0203 in the OTC market on April 12. However, the shares surged over 350 percent in a few days up to $0.095 as the management is working on selling as much inventory as possible while reducing headcount and fixed expenses.
The company announced earlier this week that Michael Healy, senior managing director at FTI Consulting, is its new chief restructuring officer. This decision follows Fisker’s recent agreement with an investor, set to expire this Friday.
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Fisker has recently withdrawn all financial and operational guidance for 2024 and appointed both Deutsche Bank and PJT Partners as financial advisors to explore strategic alternatives.
Magna, the manufacturing partner, notified its workforce in Graz (Austria) on Wednesday that will reduce around 500 positions. With the production of the Fisker Ocean model halted for an undetermined time, Magna found itself compelled to implement substantial workforce reductions.
In late March, Fisker started considerable discounts on the 2023 inventory with the Extreme variant now starting at $37,499 (down from $61,499), the Ultra variant starting at $34,999 (from $52,999), and the Sport’s one at $24,999 (from $38,999).
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“Our first model, the all-electric Fisker Ocean, has already garnered numerous awards for its design. As of April 16, 2024, the company has delivered over 6,400 Oceans,” the EV maker stated.
In late February, Fisker had reported the production of 10,193 units and the delivery of 4,929 vehicles which resulted in more than 1,471 vehicles delivered from January 1st until April 16. Fisker delivered its first vehicle to a customer on May 5, 2023, in the Danish capital Copenhagen.
Fisker spent $904.9 million in cash in operating and investing activities during 2023 and saw its cash balance decrease by 411 million. The company disclosed its cash balance reduced from $736.5 million by the end of 2022 to $325.5 million on December 31, 2023.
Fisker received the delisting notice of its stock from the New York Stock Exchange on March 25 and started trading on the OTC market, where securities trade via a broker-dealer network.
Written by Cláudio Afonso | [email protected] | LinkedIn | X
