Two U.S. Senators Worry Fisker Could be Sold to Chinese Firm
February 21, 2013 11:49 AM
comment(s) - last by
They don't want the automaker to end up like A123 Systems
After bankrupt battery company
A123 Systems was (mostly) acquired by a Chinese company
, two U.S. senators now worry that automaker Fisker Automotive will have the same fate.
Sens. Chuck Grassley (R-Iowa) and John Thune (R-South Dakota) have expressed concern that taxpayer dollars will support a company with foreign ownership if Fisker is acquired by a Chinese company.
"Senator Thune and I asked the Energy Department about potential foreign ownership of Fisker in June 2012. When we raised concerns about taxpayers supporting a company with foreign ownership, the Energy Department waved those concerns away," Grassley said. "Now, those concerns may soon become a reality. Like A123, this looks like another example of taxpayer dollars going to a failed experiment. Technology developed with American taxpayer subsidies should not be sold off to China. I hope there's at least some accountability at the Department of Energy, but given its track record, I'm not holding my breath."
It has been strongly suggested that two Chinese companies -- Geely Automotive and Dongfeng Motor Corp. -- are looking for a majority stake in Fisker. It has also been rumored that Fisker could move all of its auto production to China if it made a deal with a Chinese company.
A deal isn't expected to be made until next month at the earliest. Fisker made mention that it is considering offers from all over the world -- not just China.
received $529 million in U.S. Department of Energy (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.
In October 2012,
the House Oversight and Government Reform Committee
decided to look into
the 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.
In December 2012, Fisker's battery maker A123 Systems was
Chinese firm Wanxiang Group
about $260 million. A123
filed for bankruptcy
in October 2012.
Earlier this month, Fisker said it hoped to
restart production of its Karma plug-in
"fairly soon" as it waits for
A123 to come out of this bankruptcy situation.
The Detroit News
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RE: Clause left out?
2/21/2013 1:23:07 PM
Assets are liquidated to pay back the loan providers. Otherwise the US Government wouldn't get a dime back. Loans have inherent risk or otherwise they'd be called deposits. Loans can't be enforced on bankrupt companies if they have no assets to repay the loan. The Chinese bidders are simply bidding on an item at auction.
RE: Clause left out?
2/21/2013 1:34:56 PM
To my knowledge Fiskar has not declared bankruptcy. Additionally, there are several forms of bankruptcy, very few of which actually liquidate the company, kill off virtually all debts and dispose of assets.
There are many different U.S. Government liens (including loans) that get around even liquidations, most IRS liens are like that, to name just one U.S. Government agency with those types of liens.
So yes, there are U.S. Government obligations that can be forced upon any company even if it has no assets -- and forced upon any company that buys either the company or its assets.
And, the Chinese "bidders" are not buying something at auction. From everything I've read, they are interested in buying controlling interest in the company itself. Fiskar isn't liquidating/dissolving the company then selling off specific assets to several different bidders.
RE: Clause left out?
2/21/2013 1:33:18 PM
That's not what's happening to Fisker. They aren't bankrupt, at least not yet.
A123 did go bankrupt, but fetched $260 million. That's about twice the size of the drawn funds from their DOE loan. Either its going to be paid back with the proceeds of the puchase (which just got cleared by the Feds), or Wanxiang Group took ownership of the loan as part of the whole package.
"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings
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