Fisker announced on Monday that it was pausing production for six weeks. The company was in talks with a giant automaker to keep its business viable and deal with piling inventory. Shares fell after the announcement. The beleaguered electric vehicle maker saw a 13.68 percent share fall on Monday morning.
Last week, a popular outlet reported that the California-based electric vehicle maker Fisker was considering filing for bankruptcy, and its shares plunged by almost 52 percent in a single day on March 14. This led to a domino effect as shares of Tesla, Rivian, and Lucid also fell by single digits.
Fisker responded to a report in the Wall Street Journal that the company was exploring bankruptcy management. The EV startup said that it commonly engages with financial advisers to raise additional capital and explore partnerships with large automakers.
Fisker also said it could not file its financial report on time and failed to make an interest payment due late last week. It said it delayed the payment to take advantage of a 30-day grace period as it seeks partnerships.
According to a filing with the U.S. Securities and Exchange Commission, Fisker said it had entered into a financing commitment. The undisclosed investor will invest $166.67 million in senior secured convertible notes.
The notes will be sold in four tranches. The investor can convert the notes to common stock of Fisker at the investor’s discretion.
Fisker paused its operations to deal with both business investments and also due to excess inventory. Its current inventory of vehicles from 2023 and 2024 stands at 4,700. It values these vehicles at over $200 million.
Earlier in March, Reuters reported that Nissan was in talks with Fisker. If the talks materialize, it would be a significant lifeline for the cash-strapped startup facing a cash crunch and having excessive inventory.
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