• Sat
  • Dec 20, 2014
  • Updated: 7:11pm
BusinessChina Business
CARS

China's Wanxiang wins auction for troubled US hybrid-car maker Fisker

PUBLISHED : Sunday, 16 February, 2014, 5:10am
UPDATED : Sunday, 16 February, 2014, 5:10am

China's Wanxiang Group won an auction for Fisker Automotive, a maker of luxury plug-in hybrid cars, with a US$149.2 million bid, almost six times what the US company was seeking when it filed for bankruptcy.

In winning the four-day auction, which went through 19 rounds of bidding, Wanxiang topped Hybrid Tech, a company led by Richard Li Tzar-kai, the son of Hong Kong's richest man, Li Ka-shing. Wanxiang was founded by billionaire Lu Guanqiu.

Wanxiang's offer included US$126.2 million in cash and US$8 million in assumed liabilities, Fisker said in a statement. US bankruptcy judge Kevin Gross was scheduled to consider approving the sale on Tuesday.

When it filed for bankruptcy in November, Fisker asked Gross to let Hybrid buy the company for about US$25 million.

Hybrid last year paid the US Energy Department US$25 million for the right to collect a US government loan that Fisker had defaulted on without making a payment.

Unsecured creditors objected to the price and helped bring in Wanxiang, China's largest car-parts supplier, in December.

"It's tremendous," said William Baldiga, an attorney for the creditors. "I'm enjoying my ride home tonight."

With the assets, the Chinese buyer could revive the Fisker brand in the world's biggest car market, which is struggling to reduce some of the globe's worst air pollution. It would also provide an entry point to selling cars in the US. Wanxiang already owns the successor to the US company that supplied batteries to Fisker until collapsing under the cost of recalling defective power packs.

Henrik Fisker, who founded the carmaker in 2007, told the US Congress in April that safety recalls, the bankrupt battery supplier and shipments lost to Hurricane Sandy hurt the company's finances.

Fisker listed assets of as much as US$500 million and debt of as much as US$1 billion in its November 22 Chapter 11 petition. The company sought creditor protection after defaulting on the US loan. It had drawn about US$192 million of the initial commitment of US$529 million from a federal programme intended to spur production of alternative-energy vehicles.

"This is a great result for all Fisker stakeholders, including Hybrid Tech and Fisker's general unsecured creditors," Marc Beilinson, the carmaker's chief restructuring officer, said in the statement.

Among Fisker's assets are 18 patents covering grille designs, a fender vent and electric-vehicle drivetrain technology, according to the US Patent and Trademark Office database. It also had at least 18 more patent applications pending, including in aluminium subframing and solar-car technologies, said Charles Shifley, a Chicago patent attorney.

Fisker said the sale should close "promptly".

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

3

This article is now closed to comments

lucifer
Great! Now it can suck Wanxiang dry too. Does this guy look like he has any idea what he just did? Chinese "tycoons" only flourish in the Mainland, where guanxi, corruption, a lack of corporate transparency and good governance allows them to succeed. These guys are usually neither educated or experienced in anything that relates to the actual market conditions of the outside world. I predict this will end in disaster as will Volvo. Somehow I think that like most mainland Tycoons, this guy a structured a deal where he takes almost no risk, but gets all the gain.....
Beaker
Hi Lucifer, Unlike most tycoons as you mentioned, this Wangxiang seems to be a few cuts above your typical SOE. First of all, it is not an SOE. During the distressed days of Detroit around 2007-10, WX went around the US buying distressed parts suppliers keeping all of their engineering offices intact when the prospects for those employees was unemployment. Certainly, it was not for their production capacity when looking at the end of the Bush regime and not certain a Democrat would win. Bail out of the Auto Industry was not a foregone conclusion. What WX got was their technology and engineering. Then, WX bought A123, now Fisker and license to produce EVs in China. That makes them an OEM for NEV in China with real technology and funding. I'm in the business of cars and NEVs. I am just now requesting our people to arrange a visit to WX. I am NOT basing my POV on just opinions. I share your bias towards most rich people in CN and how they got there, but I do not agree with you on this one case.
eric.rooney@gmail.com
This is awesome.
 
 
 
 
 

Login

SCMP.com Account

or