Fisker, the electric vehicle startup, has announced a strategic move amidst financial challenges and sluggish demand for its cars. The company disclosed its decision to halt production for six weeks and embark on a fundraising endeavor, aiming to secure up to $150 million through the sale of convertible notes. This pause in production comes amidst a cash crunch, with Fisker noting that no Ocean SUVs were manufactured in January, and its manufacturing partner, Magna, producing only about 1,000 vehicles between February 1 and March 15.
In its effort to bolster its financial position, Fisker plans to issue senior secured convertible notes with a 10% original issue discount, potentially yielding the targeted $150 million. The company also reiterated ongoing negotiations with a major automaker for a potential partnership or investment, though the specific entity remains undisclosed. Previous reports suggested that Nissan was in advanced talks to inject capital into Fisker, which could offer a crucial financial lifeline to the struggling EV startup.
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Fisker’s financial challenges have been evident for some time, with concerns about its ability to sustain operations prompting the company to seek partnerships or investments to ensure its viability. In February, Fisker expressed doubts about its continued existence as a going concern and paused investments in future projects until securing a partnership with an automaker. Additionally, reports surfaced indicating that Fisker has enlisted restructuring advisers to explore potential avenues, including the possibility of bankruptcy.
