U.S. sells $50 million green-tech loan at sharp discount

DETROIT, Sept 5 Thu Sep 5, 2013 7:37pm EDT

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.

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Comments (1)
Robert.Boston wrote:
This loan program, the Advanced Technology Vehicle Manufacturing loans, was set up under President G.W.Bush, not President Obama. While its true that Bush was out of office Blythe time this particular loan was approved, this article misrepresents the politics of the program’s origin.

It’s worth noting that,of all these loans, only Tesla has paid it’s back.

Sep 05, 2013 10:40pm EDT  --  Report as abuse
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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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