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Hybrid Technology, led by Hong Kong billionaire Richard Li Tzar-kai, has bid US$55 million for Fisker Automotive’s assets, just days after a bankruptcy judge in Delaware rejected Hybrid’s plan to take over the failed US maker of electric vehicles in a private sale.
Hybrid said in court papers on Monday that it’s offering US$30 million in cash and would cancel US$25 million in debt that Fisker owes Hybrid as its senior secured lender.
It also promised that at least US$5.5 million of the cash portion will go to Fisker’s unsecured creditors if they switch to backing Hybrid instead of rival suitor Wanxiang as the so-called “stalking horse bidder” in the auction.
At a hearing on Monday afternoon, a Fisker lawyer told US bankruptcy judge Kevin Gross that Fisker will ask the court to take the uncommon step of designating Hybrid and Wanxiang, the Chinese car parts conglomerate, as joint stalking horse bidders.
A stalking horse bidder is a suitor, chosen by a bankrupt company, with an initial bid that serves as a floor for subsequent bids.
“We are very, very happy with the position that we find ourselves in,” said Fisker lawyer Ryan Preston Dahl.
Dahl said Fisker is evaluating whether to hire an investment adviser to help it analyse the competing proposals from Hybrid and Wanxiang. He told the judge that lawyers were still trying to reach agreement on whether Hybrid should continue providing financing to Fisker during the bankruptcy case or be replaced as bankruptcy lender by Wanxiang.
Hybrid’s lawyer Peter Benvenutti said his client is willing to continue in its role as Fisker’s bankruptcy lender, but that it has concerns about proposed bidding procedures and wants “a level playing field”. He did not offer details.
In submitting its new proposal Monday, Hybrid also reversed its position on buying the former General Motors site in Wilmington, Delaware, where Fisker had planned to make cars.
Previously it said it had no interest in building cars in the state, but Hybrid spokeswoman Megan Grant said in an e-mail on Monday that Hybrid plans to use the Delaware plant to “meet consumer demand and address market conditions”.
Wanxiang, in making a US$35.7 million cash bid for Fisker, had previously said it would continue developing and designing a second-generation line of Fisker vehicles and make them at the shuttered GM plant once the cars were ready for mass production in large volumes.
In a separate bankruptcy case, Wanxiang recently purchased Fisker’s former battery supplier, A123 Systems, which is now known as B456 Systems.

	We are very, very happy with the position that we find ourselves in

	Ryan Preston Dahl, lawyer for Fisker Automotive
Governor Jack Markell, whose administration provided US$20 million in loans and grants to Fisker as an incentive to build cars in Delaware, has supported efforts that might lead to vehicle production resuming at the plant as the result of Fisker’s bankruptcy.
Markell’s spokeswoman Cathy Rossi confirmed that the governor and senior staff officials have talked to representatives of both Hybrid and Wanxiang to convey the state’s interest in bringing manufacturing back to the former GM plant.
“Nothing is certain at this early stage in the process, but these are potentially good developments for Delaware,” Markell’s economic development director, Alan Levin, said in a statement.
“The auction process appears already to have led to improved terms for creditors and also to additional interest in potentially utilising the Boxwood Road facility.”
Fisker filed for bankruptcy protection in November. The move came after the company drew US$192 million on a US$529 million green-energy loan from the Obama administration before US energy officials suspended funding in 2011.
Federal officials suspended the loans after Fisker failed to meet several sales and production milestones for its US$100,000 Karma luxury car. The Karma’s problems included vehicle fires and recalls, problems with battery packs, the bankruptcy of Fisker’s primary battery supplier, A123 Systems, and inventory losses from Superstorm Sandy, which destroyed hundreds of vehicles at a port in New Jersey.
Hybrid recently paid US$25 million for the Department of Energy’s outstanding loan to Fisker, which resulted in a loss to US taxpayers of US$139 million. Hybrid is still looking to recover the remaining loan and, as new senior secured lender, had wanted to take control of Fisker.
Unsecured creditors balked and threw their support towards Wanxiang and its cash offer as the starting bid in a competitive auction.
On Friday, Gross ordered that Fisker’s assets be sold at auction and capped Hybrid’s credit bid at US$25 million. Hybrid said in court documents on Monday that it is prepared to fight that decision.
“Hybrid believes that the ruling was erroneous, intends to seek appellate review or other relief as promptly as practicable, and expressly reserves all of its rights in that regard,” lawyers for the company wrote in the filing.
A lawyer for Hybrid asked Gross on Monday to sign a final order and judgment regarding Friday’s ruling so that the appeals process could start, but the judge said he needed time to consider the request, as did Fisker’s lawyers.
Lawyers for the creditors’ committee objected to the request, arguing that Friday’s ruling involved only process issues, and that if Hybrid wins the resulting auction, the ruling is irrelevant.


Richard Li's Hybrid Technology raises bid for Fisker to US$55 million

Reversing itself, Hybrid Technology now says it plans to use GM's former Boxwood plant in Delaware to “meet consumer demand and address market conditions”. Photo: AP

US judge rejects Richard Li's Fisker bid, allows China's Wanxiang to bid

Richard Li

Wanxiang raises bid for Fisker in battle with rival suitor owned by Richard Li

Lawyers for Fisker are pressing the judge to approve a private sale of the failed US maker of electric cars to Hybrid Technology. Photo: AP

Fisker asks US court to shut out mainland suitor and approve its sale to Richard Li instead

Fisker has not made its signature Karma vehicle in more than a year. Photo: AFP

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