Refile: CORRECTED-UPDATE 3-EV startup Fisker to raise funds, pause production after missing interest payment (March 18)

Fisker

13/05/2024 14:42

(Refiles to say March 18, not March 15, in advisory. The story
was corrected to remove reference to CVI Investments'
headquarters)
       March 18 (Reuters) - Fisker  FSR.N  said on Monday it
would pause production of its electric vehicles for six weeks
and raise up to $150 million in funding by selling convertible
notes after missing an interest payment, as the startup tries to
navigate a cash crunch.
    The company added that none of its Ocean SUVs were produced
in January, while its manufacturing partner Magna's  MG.TO 
Austrian unit made about 1,000 vehicles between Feb. 1 and March
15.
    Fisker delivered about 1,300 vehicles in 2024 and the value
of inventory of completed vehicles was more than $200 million,
according to the company.
    The senior secured convertible notes will have a 10%
original issue discount for gross proceeds of up to $150
million.
    The notes are being sold to CVI Investments, which is
working through Heights Capital Management, and the investment
fund can convert the debt into equity in Fisker, the EV firm
said in documents filed with the U.S. Securities and Exchange
Commission.
    Fisker said it did not make the $8.4 million interest
payment on March 15 for some convertible notes due 2026 despite
having enough liquidity, as it wanted to take advantage of a
30-day grace period to talk to its investors about its capital
structure.
    As of Friday, the company's balance of cash, cash
equivalents and restricted cash was $120.9 million, down from
$395.9 million at the end of last year.
    Fisker reiterated on Monday that it was in talks with a
large automaker for a potential transaction, but did not name
the company.
    Reuters reported earlier this month that Nissan  7201.T  was
in advanced talks to invest in the company in a deal that could
act as a financial lifeline for the cash-strapped EV startup.
    Earlier this year, Fisker started to transition its sales
strategy from a direct-to-customer model to leaning on dealers
to sell cars as it faced issues with distribution and servicing.
    The company flagged substantial doubt about its ability to
continue as a going concern in February and paused investments
in future projects until it secured a partnership with an
automaker.

 (Reporting by Akash Sriram in Bengaluru; Editing by Shounak
Dasgupta)
 ((Akash.Sriram@thomsonreuters.com; On X as @HoodieOnVeshti;
+91-74116-87774))