Written by Cláudio Afonso | Info@claudio-afonso.com | LinkedIn | X
Today, May 1st, marks the deadline for Fisker‘s agreement with the investor as the startup engages in talks with automakers regarding a potential buyout to avert bankruptcy. Fisker’s shares closed 10.70 percent lower on Tuesday at $0.0500 per share.
As per Fisker’s SEC filing, the investor agreed to temporarily forbear from demanding immediate redemption of the investment to the company from April 21 until today, May 1st.
In a recent SEC filing, the EV startup Fisker disclosed it missed an $8.4 million installment payment on March 29, violating its agreement with the investor triggering the right to demand immediate redemption of their investment to the company.
Fisker has recently withdrawn all financial and operational guidance for 2024 and appointed both Deutsche Bank and PJT Partners as financial advisors to explore strategic alternatives.
John DiDonato, Fisker’s new chief restructuring officer, told employees earlier this week via e-mail that the company is “pursuing all options to address its operating cash requirements”
Last week, DiDonato “automatically replaced” Michael Healy as chief restructuring officer as the investor “has not accepted an offer for the purchase of its notes” by April 25.
DiDonato reaffirmed that Fisker is having “discussions with prospective buyers and investors and exploring various restructuring alternatives” followed by a warning for the possibility of missing an agreement.
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Fisker’s new chief restructuring officer issued the memo in accordance with the Worker Adjustment and Retraining Notification Act, which mandates that companies with over 100 employees give a 60-day notice before significant layoffs or plant closures, as reported by BI.
Memo Transcript
“As you know, Fisker Group Inc. (the “Company” or “Fisker”) has previously communicated that it will provide updates on significant developments that may impact Fisker’s workforce.
Over the past few months, Fisker’s leadership team has been pursuing all avenues to preserve the future of the business and its path forward.
Fisker is diligently pursuing all options to address our operating cash requirements, including maintaining discussions with prospective buyers and investors and exploring various restructuring alternatives.There is a possibility, however, that these efforts will not be successful.
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Should this possibility materialize, the Company has an obligation to provide “conditional notice” that employees — including yourself — will be terminated on June 28, 2024. If the Company must terminate your employment in the future, the job loss will be permanent and the facility will be closed.
The Company has no policy creating transfer, bumping, or reassignment rights for employees laid off from the business. If needed, we will provide you with additional separation information, including information regarding unemployment, COBRA benefits, and severance pay.
This notification does not mean the Company is shutting down or ceasing operations, and receiving this conditional notice does not necessarily mean you will be let go. Fisker is operating under challenging circumstances and we are making every effort to work towards an outcome that facilitates new investment or other strategic solutions.
We appreciate your dedication and support for one another during this challenging time. Thank you for your hard work and contributions to Fisker.
In the meantime, please contact me, John DiDonato, Chief Restructuring Officer at [email] should you have any questions.
Sincerely, John DiDonato”
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.
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.
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Magna, the manufacturing partner, notified its workforce in Graz (Austria) last week 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.
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 | Info@claudio-afonso.com | LinkedIn | X
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