Fisker secures $150 million from investor, misses debt payment, pauses production, and pursues strategic talks with automaker amidst financial struggles.
Today, Fisker announced an existing investor committed to providing up to $150 million in gross proceeds, offering the company much-needed financial support. This infusion of funds grants the company breathing room as it continues negotiations with a large automaker for a potential transaction. The financing, organized in four tranches, will come from the holder of the company’s 2025-dated convertible notes, subject to certain conditions. For example, Fisker must file its 2023 Form 10-K, which was due at the end of last week, to receive the cash injection.
As of the end of last week, on Friday, March 15th, Fisker held cash, cash equivalents, and restricted cash of $120.9 million, down from approximately $325.5 million at the end of Q4 2023. (All numbers remain preliminary and unaudited.) Fisker emphasizes the necessity of raising additional debt or equity financings, forming a strategic partnership with an OEM, and generating cash from vehicle sales to remain operational. In a filing, Fisker disclosed potential measures including further operational reductions and seeking bankruptcy protection if substantial capital isn’t available to execute its business plan and meet debt service obligations.
Fisker’s Financial Struggles: Missed Payments and Negotiations
Fisker has confirmed that it failed to make an $8.4 million interest payment due on March 15th, 2024, for its convertible notes maturing in 2026. Despite having the liquidity to meet the obligation, Fisker chose not to do so. Instead, the company decided to take advantage of the 30-day grace period to engage in discussions with key stakeholders in its capital structure. Just last week, Fisker issued an official statement announcing the hiring of external advisors to aid in managing its business affairs and to assist in developing and executing strategic plans.
Sales, Production, & Inventory
Lastly, Fisker says it produced approximately 1,000 Fisker Oceans in 2024 through March 15th. It also disclosed that it has delivered approximately 1,300 electric vehicles globally since the beginning of 2024. Fisker states that it currently holds approximately 4,700 Oceans in its inventory, which includes carryover from 2023 and production from 2024. Furthermore, Fisker believes that the completed vehicles in inventory have a value exceeding $200 million. Pausing production at Magna Steyr for six weeks, starting this week, will allow Fisker to align inventory levels and advance strategic and financing initiatives.
In Fisker’s Words…
"We need significant additional funding in the near term to execute our business plan and to continue our operations. We continue to seek and evaluate opportunities to raise additional funds through the issuance of our securities, through an arrangement with a potential strategic partner, and from the sale of vehicles. If capital is not available to us when, and in the amounts needed, we could be required to further curtail our operations. Moreover, we may not be able to satisfy our debt service obligations and could need to seek protection under applicable bankruptcy laws. There can be no assurance that we will be able to raise the capital we need to continue our operations."
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