Hong Kong tycoon may be the new owner of Fisker Automotive

Article by Christian A., on October 19, 2013

Sources told Reuters that the winner of a government loan owed by Fisker Automotive is likely to be an investor group led by Hong Kong tycoon Richard Li. Fisker, which is a producer of plug-in hybrid sports cars, is now dormant. At an auction last Friday, the U.S. Department of Energy chose Li's group to sell the green-energy loan.

These sources also said that the DOE and Li are now finalizing the details of the sale, which has yet to close. By buying this loan, Li will be able to restructure Fisker unencumbered by the obligations of the DOE funds and this may allow it to possibly avoid a bankruptcy filing that would wipe out equity investors. Li, an early investor in Fisker, is the youngest son of Asia's richest man.

But sources claim that reviving Fisker outside of a bankruptcy will be a process that’s costly and complicated. Last Thursday, the DOE said that an announcement will be made on the identity of the winner as soon as final talks are completed and the sale is closed. Fisker owes $168 million to the DOE. There were at least two other groups that wanted to buy out this loan.

Fisker is unable to pay its outstanding bills and hasn’t assembled a car in about 15 months. Last April, Fisker laid off most of its workers to save cash. Last month, the DOE said that it set up the auction after it considered all possibilities of recouping the amount it owed.

To be eligible for the Fisker loan auction, bidders had to make an offer of at least $30 million. Sources didn’t say how much Li’s group had bid. In addition, the DOE required that all bids have a plan to promote the manufacturing and engineering of "green" cars in the U.S.

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