Fisker Automotive entered into Chapter 11 bankruptcy proceedings in November 2013 following mounting debts. A bidding war for its assets, and debts, has begun between Wanxiang America and Hybrid Tech Holdings– a newly-formed Hong Kong-based company.
A $25m deal was nearly complete for Hybrid Tech to buy Fisker’s assets and take over a defaulted Department of Energy loan. However, before the deal was sealed Wanxiang, a Chinese auto-parts maker, made a rival offer.
It was alleged by Fisker’s unsecured creditors in the bankruptcy court that Hybrid’s bid was unlawful because a former Fisker board member became the CEO of Hybrid Tech on the day of the deal.
This led the creditors to request an auction of Fisker’s assets with Wanxiang playing the stalking horse bidder.
In court papers the creditors made the statement: “The debtors’ proposed sale to Hybrid Tech Holdings LLC, as well as the related bid procedures, are improper and will not serve the best interests of the debtors’ creditors and parties in interest.”
The bankruptcy court judge in Delaware, US, ordered an auction of assets for the benefit of creditors. Following this both bidders stepped up their offers. Wanxiang made a bid on 10 January of $37m and a 20% share ownership for the creditors. Hybrid Technology beat this offer on 13 January with an offer of $55m.
Wanxiang America bought A123 in January 2013 for $256.6m. Following the sale, Wanxiang terminated A123’s supply deal to Fisker leaving ill feeling from Fisker toward Wanxiang.
Fisker’s creditors have argued that as Wanxiang already owns a major component of Fisker’s car– the battery– it makes sense to also acquire the electric carmaker. The auction is expected to take place in February.