U.S. sells $50 million green-tech loan at sharp discount
DETROIT, Sept 5
DETROIT, Sept 5 (Reuters) - The U.S. Department of Energy recovered only about one-sixth of its $50 million green-technology loan to Vehicle Production Group LLC, a maker of wheelchair-accessible vans now under new ownership.
AM General, which makes Humvee transports for the U.S. military, said on Thursday that it gained control of VPG after buying the federal loan extended to that company in March 2011.
The loan was provided under an Obama administration program designed to promote advanced vehicles. Republican lawmakers have blasted the DOE for its handling of the program, while the DOE said losses represent a small fraction of its portfolio.
The DOE recovered $8 million from VPG, including $5 million seized from the company's accounts in April. The DOE put its VPG loan up for auction last month and collected $3 million from the sale.
"After exhausting any realistic possibility for a sale that might have protected our entire investment, the Department determined that auctioning the remainder of VPG's loan obligation offered the best possible recovery for the taxpayer," DOE spokesman Bill Gibbons said.
VPG struggled to meet its performance targets and shut down this year. AM General had been building VPG's six-passenger MV-1 van, which runs on compressed natural gas.
AM General will now own and operate the MV-1 business. The South Bend, Indiana-based company plans to resume production, sales and product development of the MV-1 in 45 days.
After buying the DOE loan, AM General is now a senior lender to VPG and will use that position to restructure VPG's assets, AM General spokesman Jeff Adams said.
"This is not a bankruptcy proceeding," Adams said. "We are the secured lender and we will use that position to own the assets necessary to revitalize the business."
Four other companies received funding from the Advanced Technology Vehicle Manufacturing loan program, including Fisker Automotive, Ford Motor Co, Nissan Motor Co Ltd and Tesla Motors Inc.