The US Energy Department decided to put up for auction Fisker’s unpaid loan balance to reduce its losses as no buyer could be found for the troubled automaker.
The U.S. Energy Department, which offered Fisker a loan of $192 before cutting off funds in June 2011, announced in a blog post that it requires bidders to commit to doing engineering and design in the US.
“After exhausting any realistic possibility for a sale that might have protected our entire investment, the department announced today that we are auctioning the remainder of Fisker’s loan obligation, offering the best possible recovery for the taxpayer,” Peter Davidson, executive director of the agency’s loan program office, said in the post.
Fisker still has to pay about $168 million from the loan after the Energy Department managed to recoup almost $28 million from the automaker’s accounts after it missed the deadline for the first payment. The auction will take place on October 11th and initial bids can be made beginning October 7th.
“Not every investment and every company can succeed in such a competitive environment,” said Peter Davidson.
The US Energy Department stopped the loan when Fisker failed to meet production milestones for the Karma model. Most of the loan was aimed at helping the automaker develop a second model at a former GM plant in Delaware, which unfortunately was never produced. The automaker stopped production in 2012 after A123 Systems, its battery supplier, filed for bankruptcy.