US Department of Energy recovers $21 million from Fisker

Article by Anita Panait, on April 23, 2013

The United States Energy Department recovered $21 million from the reserve account of beleaguered carmaker Fisker Automotive Inc. on April 11, 2013. The move came after Fisker laid off three-fourths of the workforce due to continuing financial and production problems. The carmaker had access to $192 million in federal loans before the fund was frozen by the Obama administration in 2011 due to a series of problems.

In a statement, the Energy Department said it recovered $21 million from Fisker as it continues to seek repayment from the carmaker for a 2009 loan commitment awarded to it. An official from the Energy Department said Fisker failed to make a repayment due Monday.

The payment deadline as well as the Fisker’s financial fixes, had given rise to speculations that the carmaker would file for bankruptcy as early as Monday. However, Fisker has not filed for bankruptcy so far. The Energy Department awarded the Fisker a loan worth $529 million as part of an Obama administration program to boost electric cars and other advanced vehicles. Fisker placed its assets as collateral on the loan.

A spokeswoman for the department said that financial seizure was appropriate and noted that safeguards were written into the loan agreement. DOE spokeswoman Aoife McCarthy said that in addition to the 2011 action to freeze the loan, the department has managed to protect over two-thirds of the original loan commitment.

McCarthy remarked that while “this is a hard time” for Fisker’s employees and investors, their overall portfolio of over 30 projects continues to perform well and over 90 percent of the “$10-billion loan loss reserves Congress established remains intact”.

Topics: fisker

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