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Fisker Seeks Court Approval to Sell EVs at $14K Each

Fisker seeking court approval to sell 3,321 units of its Ocean SUVs to a New York-based vehicle leasing firm for $46.25M
July 4, 2024

Fisker, once a promising player in the electric vehicle market, is navigating its Chapter 11 bankruptcy proceedings with a potentially pivotal sale on the horizon. The company seeks court approval to sell 3,321 units of its all-electric Ocean SUVs to a New York-based vehicle leasing firm for $46.25 million, marking a significant discount from their original retail prices. This move could determine the fate of Fisker's remaining assets amidst concerns from creditors about recovering their investments.

The sale, if approved, would allow Fisker to offload these vehicles at approximately $14,000 each, considerably lower than previous market valuations. This transaction has sparked debate among stakeholders, particularly unsecured lenders who fear diminished returns amidst Fisker's substantial debt obligations amounting to approximately $1 billion.

American Lease, the prospective buyer, intends to deploy these EVs primarily for ride-hailing services in compliance with New York City's emissions regulations, effective by 2030. The agreement stipulates a waiting period before leasing the vehicles, contingent on resolving any outstanding recalls.

Legal maneuvers seek to expedite the sale process, citing operational imperatives crucial for Fisker's ongoing financial stability. However, uncertainties loom over the valuation of Fisker's other assets and the potential implications for unsecured creditors, whose concerns include the possibility of a shift towards Chapter 7 liquidation.

The involvement of Heights Capital Management, a major secured creditor, underscores the complex financial landscape surrounding Fisker's restructuring efforts. With significant debts still outstanding, the outcome of this sale could determine the extent of recovery for creditors and the future direction of Fisker amidst its bankruptcy challenges.

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