Wanxiang of China increases bid for failed Fisker
This Nov. 18, 2010 file photo shows the Fisker Automotive's Fisker Karma, a sports luxury plug-in hybrid car at the 2010 Los Angeles Auto Show in Los Angeles. (AP Photo/Damian Dovarganes, File)
Published Thursday, January 9, 2014 7:23AM EST
WILMINGTON, Del. -- Chinese auto parts conglomerate Wanxiang Group Corp. has increased its offer for Fisker Automotive, heating up the fight for the failed electric-vehicle maker.
Wanxiang sweetened its bid with an additional $10 million in cash.
An attorney for Fisker's official committee of unsecured creditors told a Delaware bankruptcy judge on Wednesday that Wanxiang may increase its offer even more if the judge approves a competitive auction for Fisker. "They have told us they have considerable room to go," said William Baldiga, the attorney.
But Fisker wants the judge to approve a private sale to Hybrid Technology LLC, which is owned by Hong Kong billionaire Richard Li. Hybrid became Fisker's senior secured lender by buying a failed Department of Energy loan for $25 million. That resulted in a loss to U.S. taxpayers of $139 million.
Hybrid is seeking to buy Fisker's remaining assets in bankruptcy. The proposed sale will be considered at a hearing Friday.
California-based Fisker, which had planned to build high-priced cars at a former General Motors plant in Delaware, filed for bankruptcy protection in November, ending a long, downward spiral that began after it received a $529 million loan commitment from the U.S. Department of Energy. Fisker drew $192 million on the Obama administration's green-energy loan before DOE officials suspended funding in 2011 after the automaker failed to meet several sales milestones for its problem-plagued Karma luxury vehicle.
Attorneys for Fisker and Hybrid have argued that the sale needs to be approved quickly.
Judge Kevin Gross told attorneys Wednesday that he won't be pressured by Hybrid to make a decision at the hearing Friday.
Under Hybrid's plan, unsecured creditors who are owed an estimated $250 million stand to receive a fraction of a penny on the dollar. Baldiga said Wanxiang's offer could result in a recovery for unsecured creditors of 50 cents or more on the dollar, but that Fisker has been unwilling to consider a competitive auction.
Wanxiang made a previous attempt to acquire control of Fisker and, in a separate bankruptcy case, recently bought the company that served as Fisker's primary battery supplier, A123 Systems.