US Energy Department starts considering bids for Fisker loans

Article by Anita Panait, on October 14, 2013

The United States Department of Energy has began looking at offers to acquire Fisker Automotive's federal loan on October 13, 2013. The move is seen as the possible start of an extensive and expensive process to bring Fisker back to life. The carmaker has not built a vehicle in about 15 months and has not had sufficient funding to pay millions in outstanding bills.

It also sent home most of its workers in April after it run short of cash – just a month after co-founder and executive chairman Henrik Fisker had his exit. The Energy Department remarked in September that it planned the auction after "exhausting any realistic possibility" that it could recover all the $168 million still owed by Fisker.

Deadline for bids for Fisker's DOE loan was on Oct. 7, with an auction set Friday. Potential bidders are required to offer at least $30 million to qualify, with 10 percent down due with the bid, two people privy with the process told Reuters.

Reviving Fisker, however, would entail more cost. According to sources privy with Fisker’s finances, reviving the carmaker’s original plan to build several models could cost up to half a billion dollars. US officials in charge of the bidding process could decide on a winner as early as next week.

The winning bidder and the department will then agree on the final details of the note sale. DOE granted a $529-million loan to Fisker in 2009 under a federal program to promote green vehicles. Fisker, however, failed to achieve performance targets, forcing the Energy Department to freeze its credit line in June 2011.

Essentially, the new Karma is Fisker Automotive's first car, as built according to the carmaker’s Sustainable and Accountable Design philosophy.

The carmaker considers the development, production, marketing and disposal of cars as an energy- and resource-intensive project. Being a new company with a clean slate, Fisker seeks to further improve the process and thereby change the expectations of everyone. Fisker Automotive is aiming to become a carmaker that is most dedicated to sustainability and accountability, which it tries to pursue by continuously finding ways to hike efficiency while reducing environmental impact and its carbon footprint.

Fisker plans to sell and service the Karma and all its future offerings through a global network of established independent retailers. Around 45 locations have been pinpointed in the United States, with a similar number intended in Europe. Developing and managing Fisker’s retail network in Europe are importers like Nellemann (Copenhagen, Denmark), Fisker Italia (Merano, Italy), Emil Frey Group (Zurich, Switzerland) and BD Otomotive (Istanbul, Turkey). In addition, Fisker inked a non-exclusive distribution deal with China Grand Automotive in Shanghai in December 2010.

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