WILMINGTON, Del. (AP) — Chinese auto parts conglomerate Wanxiang Group Corp. has increased its offer for Fisker Automotive, heating up the fight for the failed electric-vehicle maker.
Wanxiang sweetened its bid with an additional $10 million in cash, raising what it hopes will be the starting bid in a competitive auction to about $35.7 million.
William Baldiga, an attorney for Fisker's official committee of unsecured creditors, told U.S. Bankruptcy Judge Kevin Gross that Wanxiang may increase its offer even more if the judge approves its proposed sale process.
"They have told us they have considerable room to go," Baldiga said.
Fisker attorneys, meanwhile, are pressing the judge to approve a private sale to Hybrid Technology LLC, which is owned by Hong Kong billionaire Richard Li. Hybrid became Fisker's senior secured lender by buying a failed Department of Energy loan for $25 million last fall. That resulted in a loss to U.S. taxpayers of $139 million.
California-based Fisker, which had planned to build high-priced cars at a former General Motors plant in Delaware, filed for bankruptcy protection in November, ending a long, downward spiral that began after it received a $529 million loan commitment from the U.S. Department of Energy. Fisker drew $192 million on the Obama administration's green-energy loan before DOE officials suspended funding in 2011 after the automaker failed to meet several sales milestones for its problem-plagued Karma luxury vehicle.
Under Hybrid's plan, unsecured creditors who are owed an estimated $250 million stand to receive only a fraction of a penny on the dollar. Baldiga said Wanxiang's offer could result in a recovery for unsecured creditors of 50 cents or more on the dollar, but that Fisker has been unwilling to consider a competitive auction.
Attorneys for Fisker and Hybrid have argued that the sale to Hybrid needs to be approved quickly, but attorneys for the U.S. trustee and unsecured creditors expressed reservations about the speed with which Fisker was moving. Gross told attorneys that he won't be pressured by Hybrid to make a decision at the hearing Friday.
Hybrid is seeking to buy Fisker's remaining assets in bankruptcy using a $75 million credit bid. That's based on the money it is owed as the company's senior secured lender rather than cash.
Wanxiang's cash offer includes $25 million for the DOE loan collateral, equal to what Hybrid paid for the DOE loan balance. Wanxiang wants to level the playing field for a competitive auction by capping Hybrid's credit bid at $25 million.
But Fisker attorney Ryan Preston Dahl told Gross on Wednesday that there is no reason for the court to cap Hybrid's credit bid at $25 million. Dahl said that will be a key issue for Gross to resolve at the hearing Friday.
Wanxiang made a previous attempt to acquire control of Fisker and, in a separate bankruptcy case, recently bought the company that served as Fisker's primary battery supplier, A123 Systems.
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Original headline: As companies fight for Fisker, Wanxiang ups bid
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