While Henrik Fisker’s departure from the company he founded has dominated the headlines of late, Fisker Automotive itself still has other problems to deal with.
Top of the list is finding a buyer to help fund its future, and up until now, two Chinese companies–Dongfeng Motor Group Co. and Zhejiang Geely Holding Group have led the bidding.
Volvo owner Geely, expected to be the highest bidder, has now pulled out according to Reuters–citing risks associated with Fisker’s government loan obligations.
The U.S. Department of Energy (DoE) placed Fisker under several conditions when granting it loans worth $529 million, including obligations to restore capacity and jobs at its Delaware plant.
According to sources, Geely has deemed the obligations “too complicated to handle and [they] seem too risky… The plan’s footprint was too big. It would take a long, long time to fill up the plant with products and restore employment there.”
Geely’s interest in the Delaware plant in particular was partly linked to its desire to build Volvos there, with an aim to increase demand in the U.S. market.
Now, Dongfeng remains the sole bidder. The company is said to have submitted its final offer last week. Before anything goes through, the bid must also be approved by the DoE.
It’s likely any deal will also involve Chinese auto parts supplier Wanxiang Group. Wanxiang recently bought bankrupt battery maker A123 Systems, which supplied Fisker Automotive with battery packs until operations shut down in summer last year. As a result, Fisker’s production is currently on hold.
None of the parties involved have yet commented on Geely’s exit from the bidding process.
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