The U.S. Department of Energy took a risk on Fisker Automotive and lost; it granted a $529 million loan to the automaker under its 2009 Advanced Technology Vehicles Manufacturing program, $200 of which was still owed, but Fisker hasn’t been able to meet prospective goals. Now the DOE is wrestling Fisker’s arm behind its back and forcing it to pay back the loan. This Monday sources say Fisker owed its first payment on the loan, which is said to be at $10 million, but didn’t pay. The cash-strapped company was forced, therefore, to pay $21 million on April 11th.
“The department recouped the company’s approximately $21 million reserve account – funds that came from the company’s sales and investors, not our loan – and will apply those funds to the loan,” said DOE spokeswoman Aoife McCarthy on Monday, according to Reuters.
Wresting the $29 million isn’t making things easy for Fisker. They have already tried a variety of things to help save their company, from changing their management, to searching for a buyer in China, to hiring a law firm, Kirkland & Ellis, to prepare for possible bankruptcy, to firing three quarters their staff to conserve money, to talking to half a dozen automakers, from Geely, to Dongfeng Motor Group Co, and others – but none would touch them on account of the DOE loan.
In a particularly demoralizing titled hearing, “Green Energy Oversight: Examining the Department of Energy’s Bad Bet on Fisker Automotive,” Henrik Fisker and co-founder Bernhard Koehler will testify on April 24 before the House Oversight and Government Reform Committee about the loan the DOE extended to the automaker.
Whether Fisker has any chance at all at this point may become clearer at the hearing, but being forced to exhaust their reserves, when less than $30 million is available, won’t much help the ambling company in its plight.