House Oversight Seeks Answers From Energy Dept. Regarding Fisker image

The Government Reform Committee and the House Oversight asked the Energy Department if it will allow investors to recoup funds if Fisker goes bankrupt.

The Energy Department offered the California startup a $529 million low-cost loan, $193 million being used to develop the Fisker Karma, that was assembled in Finland, but designed and engineered in the US.

“The government “allowed Fisker to find additional private investors after failing to adhere to financial covenants. However the details of how these private investments affected underlying terms to the original DOE loan are unclear,” said House Oversight chairman Darrell Issa, R-Calif.

In 2011 the Energy Department froze the rest of the loan due to delays and quality issues regarding the Karma. Last week the automaker announced it postpones production for the Atlantic by at least two years, due to lack of money. Officials said that the Department hasn’t restructures Fisker’s loan and that the automaker is allowed to raise private equity.

The automaker has announced it has managed to gather until now at least $1.2 million in private equity, but did not say how much money it needs to begin production of the Atlantic. Fisker spokesman Roger Ormisher said that the automaker hopes to present a production timeline by the end of this year, but unfortunately the plan depends on whether the company will manage to raise enough money for the production.