Following the failure of Fisker Automotive Inc. to repay federal loans, the U.S. Department of Energy will try to unload its loan in the plug-in electric car maker through an auction, the agency said Tuesday.
DOE decided to auction off the loan "after exhausting any realistic possibility for a sale that might have protected our entire investment," Peter Davidson, the executive director of the agency's Loan Program Office, wrote in a blog post Tuesday.
Fisker won a $529 million loan from the Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program in September 2009, of which it drew down $192 million before defaulting on payments. Despite the influx of capital from public and private investors, Fisker never turned a profit, losing an estimated $1 billion from 2008 to 2012.
Fisker was struggling to keep up on its payments on the Department of Energy loan. After the agency determined the company was not meeting the required milestones on the loan, it froze Fisker's credit line in May 2011.
In 2011-12, Fisker is estimated to have built 2,450 Karmas, losing at least $35,000 on each of the $100,000-plus cars, according to Reuters. Last-minute design tweaks cost the company between $50 million and $100 million before it had even sold its first car.
Co-founder Henrik Fisker left the company in March 2013, and shortly thereafter, in April, Fisker defaulted on its loan to the government and brought in a team of restructuring advisers. Most employees were terminated this spring.
The government recovered only about $21 million from Fisker, according to the Wall Street Journal, which reported earlier that DOE was thinking of auctioning the loan.
There have been several suitors for the Fisker brand and the Karma vehicle, including Fritz Nols AG, a Hamburg, Germany-based investor group lead by Ingo Voigt, which has offered $25 million for Fisker to the Department of Energy, according to German magazine Autobild.
Voigt stated in a Facebook post last week that the group had submitted a "detailed offer including a signed [letter of intent] and a short presentation of our restructuring plan" to the DOE. The post was reported by Green Car Reports.
Other groups that have expressed interest in buying the company include Chinese auto parts maker Wanxiang Group as well as a Hong Kong investment group, the Journal reported. But in most cases, the buyers are offering the U.S. government much less than the amount owed for the company.
Bids on Fisker's remaining $168 million in outstanding debt are due by Oct. 7 and the auction will take place Oct. 11, according to a U.S. government website.
In Tuesday's blog post, Davidson said DOE "will require all bids to include a commitment and business plan that promotes domestic manufacturing capabilities and related engineering for advanced technology vehicles here in the United States."
Attempts by Automotive News to contact Fisker for comment were unsuccessful.
