EV Startup Fisker Files For Bankruptcy, Plans Asset Sale

(RTTNews) - Fisker Inc. announced that its operating unit Fisker Group Inc. has filed for Chapter 11 bankruptcy protection after the electric vehicle startup faced financial obstacles, manufacturing pause and recalls, among others. The company, which has sold thousdands of Fisker Ocean SUVs in North America and Europe, also plans sale of its assets under the proceedings.

In a statement, the company, founded by car designer Henrik Fisker, said it is in advanced discussions with financial stakeholders regarding debtor-in- possession financing and the sale of its assets.

Fisker said, "Like other companies in the electric vehicle industry, we have faced various market and macroeconomic headwinds that have impacted our ability to operate efficiently."

Fisker reportedly has run out of cash after its effort to change its business model failed. The firm also struggled to find a financial support.

California-based company said its previously announced manufacturing pause will remain in place during the process.

Fisker intends to file customary motions with the Bankruptcy Court to ensure its reduced operations are able to continue, including paying wages and benefits, preserving certain customer programs and compensating needed vendors on a go-forward basis.

Meanwhile, Fisker Inc. and other U.S. Units as well as units outside the U.S. are not part of the Chapter 11 filing.

According to the filing, the company estimated assets of $500 to $1 billion and liabilities of between $100 million and $500 million.

The company has been facing financial struggles for so long. In March, it reduced the prices of some of its vehicles to avoid a potential bankruptcy, prompted by a terminated deal with an anonymous automaker.

The price reduction decision came a few days after the New York Stock Exchange delisted Fisker's shares, stating that the "stock is no longer suitable for listing based on abnormally low price levels."

Last week, the company announced two recalls for thousands of vehicles in North America and Europe for software-related issues.

Fisker Inc. is the successor to Fisker Automotive, also founded by Henrik Fisker, but went into bankruptcy in 2013.