The U.S. Department of Energy sold its green-technology loan in Fisker to Hybrid Technology for $25 million.
The investor group bought one loan extended by the U.S. Department of Energy, originally worth $168 million. In all, the DOE has recouped about $53 million on its $192 million investment in Fisker.
"After having evaluated and pursued all other alternatives, we believe the sale to Hybrid and the related Chapter 11 process is the best alternative for maximizing Fisker Automotive's value for the benefit of all stakeholders," Marc Beilinson, Fisker Automotive's chief restructuring officer, said in a statement.
"We believe that the Fisker Automotive technology and product development capability will remain a guiding force in the evolution of the automotive industry under Hybrid's leadership."
In a statement, Hybrid Technology said the purchase of the government loan was the first step toward eventually restarting production and sale of the Karma, which Fisker has not built in about 18 months, and the development of other hybrid-electric vehicles.
"As we continue to examine Fisker's opportunities, we will be making decisions about the structure and footprint of the new business," a spokeswoman for Hybrid Technology, Caroline Langdale, said in a statement.
Although the design of the Karma drew rave reviews, it had many quality problems that hurt the company's image and drained cash. In April, Fisker fired most of its staff to save cash following an unsuccessful search for a buyer.
Its financial woes left Fisker unable to repay millions in outstanding bills to suppliers, the DOE and others. The DOE put the loan up for auction in mid-October.
Fisker originally won a $529 million line of credit in 2009 as part of the Obama administration's effort to boost advanced vehicle development in the United States.
But the DOE froze Fisker's credit line in mid-2011 after the company missed certain performance targets.
Political controversy
The Energy Department decided to auction its interest in Fisker, whose $103,000 Karma was driven by actor Leonardo DiCaprio and singer Justin Bieber, after the company defaulted on its loan without making a payment and attempts to find a buyer failed. The Fisker loan made President Barack Obama a target of Republican opponents who accused him of "crony capitalism."
Hybrid Technology is being represented in Washington by the Glover Park Group, a strategic communications firm, whose leadership includes Joe Lockhart, White House spokesman during Bill Clinton's presidency.
A Hybrid spokesman declined to say where the company is based or who its leadership is. "Unfortunately we can't comment beyond the press release at this time," Langdale told Bloomberg.
The Orange County Register and The Los Angeles Times, citing Rep. Marsha Blackburn, R-Tenn., and people familiar with the matter, reported Hybrid Technology is owned by Li.
Blackburn is vice chair of the U.S. House of Representatives Energy and Commerce Committee.
The L.A. Times said the U.S. government has a commitment from Hybrid Technology to work to move the restart of Karma production to the United States from Finland and keep Fisker’s design and engineering operations in California.
Vehicles destroyed
Fisker was co-founded by and named after former Aston-Martin designer Henrik Fisker, and backed by $1.2 billion in venture-capital investments. It stopped making cars last year shortly after a Karma quit running during a Consumer Reports road test and failures in batteries supplied by A123 Systems Inc. led to a U.S. recall and A123's bankruptcy.
Some of Fisker's remaining vehicles were destroyed by flooding during Hurricane Sandy after it ceased production, and its insurance company refused to pay for the damages. Henrik Fisker quit after about 75 percent of the company's employees were fired.
When it resorted to auctioning off the loan balance, the Energy Department said it would require bidders to commit to doing design and engineering work in the U.S., building on the program's intention to create or retain jobs in the country.
Fisker still faces millions of dollars in court judgments over unpaid bills, and would have had more restructuring options absent the government's financial interest.
Taking applications
The U.S. vehicle-lending program, meanwhile, still has 60 percent of its $25 billion in available money and hasn't awarded a loan since 2011. The department recently said it would begin taking applications again, though legislation has been introduced in the U.S. Senate to stop that from happening.
Fisker, which produced the Karma in Finland, planned to use most of its original $529 million in financing commitment to develop a second model at the former GM plant in Delaware. It was never produced.
Fisker's loan was the largest approved for three startup automakers granted loans. The Energy Department earlier auctioned the balance of Vehicle Production Group LLC's $50 million loan after the closely held wheelchair-van maker failed without making a payment.
Reuters, Bloomberg and David Phillips contributed to this report.