DETROIT (Reuters) -- Fisker Automotive could file for bankruptcy protection as soon as this week as the U.S. Department of Energy pressures the green-car startup to pay back nearly $200 million in government loans.
The DoE appears to be pushing a Chapter 11 filing soon by Fisker, several sources close to the company told Reuters on Monday. Fisker's attorneys have drawn up bankruptcy documents and are ready to file in the next few days, Reuters reported.
Fisker's board of directors will discuss its options at a meeting today, one of the sources said. Directors, who have not given up on a possible sale, are expected to make a decision on the timing of a possible Chapter 11 bankruptcy filing at that time, one source said.
The relationship between the DoE and Fisker has been strained in the last several months at a time when top Fisker executives have been trying unsuccessfully to attract buyers, mainly in China and Europe, to stave off bankruptcy.
"They want to get it in the past so that the next DoE secretary doesn't have to deal with it," one source close to the talks said of the government's desire to distance itself from Fisker's well-publicized financial struggles. "They want to basically force the issue."
A DoE spokeswoman was not immediately available for comment. A Fisker spokesman did not immediately respond to a request from Reuters for comment.
Fisker, maker of the $100,000-plus Karma hybrid sports car, has not built a vehicle since last summer and has failed to secure a buyer as its cash reserves have dwindled.
On Friday, Fisker laid off 75 percent of its U.S. workforce, retaining about 50 senior managers and executives, to conserve enough cash to avoid breaching a covenant in its agreement with the DoE, people familiar with the matter said.
Fisker now has about $30 million in cash on hand and faces a $10 million loan payment to the DoE on April 22, sources said.
The DoE awarded Fisker a $529 million loan in 2009 as part of a U.S. program to fund advanced vehicle development. Fisker pledged its assets as collateral on that loan.
Fisker raised more than $1.2 billion from private investors and tapped $193 million in government loans before the DOE shut off funds in May 2011 after Fisker missed certain milestones, including delays in launching its flagship Karma plug-in hybrid.
Fisker has been trying to renegotiate terms of the April 22 payment as well as the terms of its DoE loan. But while the agency has open to changes in the past, it now appears unwilling to do the same, two sources close to Fisker said.
The DoE, which has been keeping a close watch on Fisker's finances, is senior creditor in the automaker, which gives the agency the upper hand during negotiations.
"It's almost like they want Fisker to go bankrupt," one of the sources said.
The company expects a Chapter 11 reorganization would attract a number of bids from auto manufacturers, with the proceeds from any asset sale going to "pay back the taxpayer," the source said.
Fisker has talked to "more than half a dozen" manufacturers, including Fiat, which controls Chrysler Group, two sources said. But none of the prospective buyers has been willing to assume the terms of the DOE loans.
The lay offs on Friday were the latest in a series of last-ditch efforts to conserve cash. In late March, Fisker put its U.S. workforce on furlough. It also hired law firm Kirkland & Ellis to advise on a possible bankruptcy filing.