Fisker Negotiations With Major Automaker Collapse
Fisker Inc., an electric vehicle startup, has ceased negotiations with a significant automaker regarding a potential investment deal. This move has triggered a substantial decline in Fisker's stock value, with shares plummeting over 30% prior to the market opening. Although Fisker did not disclose the identity of the automaker, sources such as Reuters suggested that Nissan was in advanced talks to invest in the company. This investment was anticipated to provide a financial boost to Fisker, which has faced significant financial challenges.
The electric vehicle maker has been grappling with financial difficulties, highlighted by a 90% decrease in share value this year. Fisker previously acknowledged a "going concern" risk in February and paused investments in future projects. In response to its financial challenges, the company had announced earlier in the month that it would suspend EV production for six weeks and seek to raise up to $150 million by selling convertible notes following a missed interest payment.
In light of the terminated negotiations, Fisker continues to assess a range of strategic options, including restructuring, refinancing existing debt, issuing equity securities, and possibly selling assets or business units. The collapse of the talks with the automaker has also cast uncertainty over Fisker's ability to meet a closing condition tied to a financing commitment and term sheet agreed upon with an investor on March 18. Fisker intends to discuss with the investor the possibility of waiving this condition or securing financing under different terms.
