Fisker Talks with Automaker Collapse Amid Production Pause

Fisker’s talks with a large automaker for a potential deal have collapsed, it said on Monday amid growing uncertainty for the cash-strapped startup that last week paused electric-vehicle production.

Trading Suspension and Strategic Reassessment:

Trading in the company’s shares, which did not name the automaker with which it was in talks, has been halted pending an announcement. The startup said that the termination of talks has led Fisker to search for strategic options, including in- or out-of-court restructurings and capital markets transactions.

“I can’t say if it is next week or next year, but it is inevitable,” Thomas Hayes, Chairman at hedge fund Great Hill Capital, said about the growing chances of Fisker filing for bankruptcy protection. A potential bankruptcy would make Fisker the second failed auto startup from Henrik Fisker, who started his career as an automotive designer and was also a Tesla consultant.

Past Challenges and Valuation:

His previous attempt, Fisker Automotive, fell victim to the 2008 financial crisis and filed for bankruptcy in 2013 despite fetching $192 million in loans from the Department of Energy. Fisker’s latest venture was founded in 2016 and went public through a merger with a blank-check firm for a valuation of $2.9 billion. But a slew of supply chain issues, production delays, and fundraising hurdles sent its market valuation crashing to less than $100 million.

Earlier this month, Reuters reported that Japanese automaker Nissan was in advanced talks about investing in the startup.