When Fisker filed bankruptcy in November, it planned to sell its assets to Hybrid Tech, the acquirer of Fisker’s $168.5 million loan from the Department of Energy, by way of credit bid. Before the sale (requiring the approval of the Bankruptcy Court) was consummated, another potential acquirer, Wanxiang Group Corp., emerged. Wanxiang originally offered $27.5 million in cash and subsequently increased its offer.
On January 10, 2014, United States Bankruptcy Judge Gross ruled that Hybrid Tech’s credit bid would be capped at $25 million (the price it paid for the DoE loan) and required that an auction for Fisker’s assets be conducted. As a result, Hybrid Tech increased its offer for Fisker’s assets to $55 million, comprised of a $25 million credit bid and $30 million in cash. Wanxiang’s latest offer provides for $35 million in cash and a 20% equity interest in the acquiring company.
The increased offers from Hybrid Tech and Wanxiang set the stage for a potentially active overbidding at the Court ordered auction expected to occur later this month and ultimately could result in a significantly improved recovery for Fisker’s creditors.