backtop


Print 7 comment(s) - last by btc909.. on Oct 23 at 11:27 PM


Fisker Karma  (Source: scm-l3.technorati.com)
The Committee wants a look at all emails exchanged between the White House, DOE and Treasury regarding tax implications of the Fisker loans

The House Oversight and Government Reform Committee is looking into U.S. Department of Energy's (DOE) original terms of its loan to Fisker Automotive, questioning whether DOE will step in to help the electric vehicle (EV) automaker if it goes bankrupt and investors are allowed to retrieve their money. 
 
"[The government] allowed Fisker to find additional private investors after failing to adhere to financial covenants," said House Oversight chairman Darrell Issa (R-Calif.) in a letter to DOE Secretary Steven Chu. "However, the details of how these private investments affected underlying terms to the original DOE loan are unclear."
 
Fisker Automotive, a California-based EV maker, received $529 million in DOE loans in April 2010. The loans were part of a program to progress development of high-tech vehicles, where Fisker received $169 million for Karma plug-in engineering and $359 million for Nina production. The loans were also meant to revamp a closed General Motors plant in Wilmington, Delaware for Fisker EV production. 
 
However, Fisker fell a little behind on its production schedule, and in May 2011, DOE froze the loans due to "unmet milestones." Fisker had only drawn $193 million of it at that point. 
 
Now, the House Oversight and Government Reform Committee wants to know if DOE will help Fisker out if it goes allows investors to retrieve funds in the event of bankruptcy. The Committee wants a look at all emails exchanged between the White House, DOE and Treasury regarding tax implications of the Fisker loans.
 
"From day one, decisions made on loan applications and projects supported by loan guarantees were made on the merits after careful review by experts in the loan program," said Damien LaVera, DOE spokesman. "Our consistent goal has been to manage these critical investments in innovative clean energy technologies in a way that manages the risk to the taxpayers."
 
DOE added that there has not been any restructuring of the Fisker loan with the department, and all borrowers in their portfolio can raise private equity. Fisker has raised $1 billion in private equity.
 
Fisker has had other problems in the recent past, such as Karma battery concerns (the company has had three recalls since December) and the two-year delay on its Atlantic vehicle production, which it announced last week. Another issue may be that Fisker can't build the Atlantic in the U.S. due to the loan freeze. 
 
To make matters worse, A123 Systems, the EV battery maker for Fisker's Karma, filed for bankruptcy earlier this month after missing loan payments. It sold all of its automotive business assets to Johnson Controls. 

Source: The Detroit News



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: This is Crazy
By tanjali on 10/23/2012 4:04:02 PM , Rating: 2
Do you think banks have fair system of landing businesses money?
And government wouldn’t have to do that job if banks
would fairly and equally treat all businesses the same, including all risk factors.


RE: This is Crazy
By Ringold on 10/23/2012 6:18:24 PM , Rating: 2
It's not the job of banks generally to be carrying that market forward. Trying to encourage banks to take huge risks like that is a recipe for banks going bust if too many go wrong at once in an unexpected way.

That's the job of those evil, wicked, heartless rich, either directly or through investment groups or private equity firms. Generally speaking, in the United States, they do a decent job.


"DailyTech is the best kept secret on the Internet." -- Larry Barber














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki