It has been an extremely volatile month for electric vehicle (EV) startup Fisker (NYSE:FSR). Last week, The Wall Street Journal reported that Fisker had hired restructuring advisors in order to prepare for a potential bankruptcy.
In response, the company noted that it does not comment on rumors and frequently works with outside advisors. It also added that it remains committed to raising capital and partnering with a large automaker. Fisker’s response failed to yield any information or reassure investors.
Today, the company announced that it had received a $150 million financing commitment and would temporarily pause production. Let’s get into the details.
FSR Stock: Fisker Announces Production Pause
The holder of Fisker’s 2025-dated convertible notes will provide the financing by buying $166.67 million of 2024 senior secured convertible notes, resulting in gross proceeds of $150 million due to a 10% original issue discount. Fisker must file its 2023 Form 10-K before it can receive the financing.
The notes will be issued in four tranches, with the first tranche worth $35 million. In addition, the notes can be converted into FSR stock at any time, signaling dilution for shareholders.
Meanwhile, the production halt was enacted in order to “align inventory levels and progress strategic and financing initiatives.” The halt will begin on March 18 and last six weeks. As of March 15, Fisker had produced about 1,000 vehicles while delivering 1,300 of them year-to-date (YTD). Its inventory totals 4,700 vehicles worth over $200 million based on company estimates.
Fisker also disclosed that its talks with a large automaker are still in the works. The deal includes potential scenarios such as an investment, vehicle platform joint development, a manufacturing partnership, or a combination of the actions.
Reuters recently reported that the automaker in question is Nissan (OTCMKTS:NSANY) and that it was focused on an over $400 million investment into Fisker’s truck platform. The potential transaction would also allow Nissan to build Fisker’s upcoming Alaska pickup truck starting in 2026.
Fisker has not confirmed or denied whether it is in talks with Nissan.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
