Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Wanxiang wins Fisker bankruptcy auction with $149 million bid

DOVER, Del. - A hard-fought auction for the remaining assets of failed electric-vehicle maker Fisker Automotive ended Friday with a winning bid by Chinese auto-parts conglomerate Wanxiang Group.

Wanxiang beat out Hybrid Technology, led by Hong Kong billionaire Richard Li, with a final bid of $149.2 million in cash and other considerations, including Fisker's plant in Wilmington, Del.

Going into the auction, which began Wednesday and ended Friday afternoon, Hybrid had offered $30 million in cash and cancellation of $25 million in debt that it says it is owed as Fisker's senior secured lender.

Wanxiang had offered $35.7 million in cash and an equity stake for creditors in a reorganized Fisker, with the possibility of additional recoveries for creditors through lawsuits against Fisker, Hybrid and other parties. Its winning bid surged to include more than $126 million in cash, $8 million in assumed debt and an equity stake for creditors in a reorganized Fisker.

On Tuesday a Delaware bankruptcy judge will consider whether to approve the sale.

"We conducted a highly spirited auction resulting in an increase in value of approximately $90 million as compared to the opening bid of the auction," Marc Beilinson, Fisker's chief restructuring officer, said in a prepared statement.

William Baldiga, an attorney for Fisker's official committee of unsecured creditors, said the auction was "a very difficult three-day process."

"Bidding was extremely spirited and competitive, and the committee is exceptionally happy to see the culmination of what it started two months ago with every other party opposed," he said.

The creditors committee was instrumental in working toward an auction, rather than letting Hybrid buy Fisker in a private sale.

California-based Fisker, which had planned to build cars at the former General Motors plant in Delaware, filed for bankruptcy protection in November. The move ended a long, downward spiral that began after it received a $529 million loan commitment from the Obama administration in 2010.

The Department of Energy suspended its green-energy loan in 2011 after Fisker failed to meet several production and sales milestones for its $100,000 Karma luxury sports car. The Karma's problems included vehicle fires and recalls, problems with battery packs, the bankruptcy of Fisker's primary battery supplier, and inventory losses from Superstorm Sandy, which destroyed hundreds of vehicles at a port in New Jersey.

Last year, Hybrid bought the outstanding $168 million balance of the Department of Energy loan for just $25 million, or 15 cents on the dollar, resulting in a loss to U.S. taxpayers of $139 million. Hybrid then moved to take control of Fisker in a speedy private sale with a $75 million credit bid.

Fisker attorneys too had argued for a quick sale to Hybrid, saying an auction was not necessary because there had seemed to be little market interest in Fisker before its bankruptcy filing. But Wanxiang, which recently bought Fisker's former battery supplier in a separate bankruptcy case, worked with Fisker's official committee of unsecured creditors to submit a rival offer.

U.S. Bankruptcy Judge Kevin Gross last month rejected Hybrid's request for a private sale and ordered an auction, capping Hybrid's credit bid at $25 million.

Hybrid tried to appeal that cap, filing a flurry of emergency motions seeking permission to directly challenge Gross' ruling. But Chief District Court Judge Gregory Sleet in Delaware this week refused Hybrid's motion and took the company to task for what he called a "barrage of 'emergency' motions of dubious merit and even more doubtful urgency."

"It appears that Hybrid's persistent haste is not entirely out of character and may be part of the 'rush to purchase' and attempt to 'short-circuit the bankruptcy process' for which the bankruptcy court chastised Hybrid," Sleet said in a footnote to his decision, which prohibited Hybrid from filing additional motions regarding the credit bid cap.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
Submit a Random Act of Kindness
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates