Fisker, the electric vehicle startup, announced plans on Monday to halt production of its electric vehicles for six weeks and raise up to $150 million in funding through the sale of convertible notes. This move comes after the company missed an interest payment, highlighting its efforts to manage a cash crunch.
During the production pause, none of Fisker’s Ocean SUVs were produced in January, while its manufacturing partner, Magna’s Austrian unit, manufactured approximately 1,000 vehicles between February 1 and March 15.
In 2024, Fisker delivered about 1,300 vehicles, and the value of inventory of completed vehicles exceeded $200 million. The senior secured convertible notes will carry a 10% original issue discount, aiming for gross proceeds of up to $150 million.
According to documents filed with the U.S. Securities and Exchange Commission, the notes are being sold to CVI Investments, which is working through Heights Capital Management. The investment fund has the option to convert the debt into equity in Fisker.
Despite having sufficient liquidity, Fisker chose not to make the $8.4 million interest payment on March 15 for some convertible notes due in 2026. Instead, the company opted to use the 30-day grace period to engage with its investors about its capital structure.
As of Friday, Fisker’s balance of cash, cash equivalents, and restricted cash was $120.9 million, down from $395.9 million at the end of last year. The company reiterated on Monday that it was in discussions with a large automaker for a potential transaction but did not disclose the name of the company.
Earlier reports indicated that Nissan was in advanced talks to invest in Fisker, potentially providing a financial lifeline for the cash-strapped EV startup. Earlier this year, Fisker began transitioning its sales strategy from a direct-to-customer model to relying more on dealers to sell cars due to distribution and servicing issues.
In February, the company expressed significant doubts about its ability to continue as a going concern and paused investments in future projects until it secured a partnership with an automaker.
