UPDATE 1-U.S. to sell nonperforming Fisker Auto loan next month
DETROIT, Sept 17 (Reuters) - The U.S. Department of Energy will auction next month a green technology loan made to Fisker Automotive, a move that may allow the struggling company to mount a comeback under a new owner.
Fisker, which has not built a vehicle in more than a year, now owes $168 million to the DOE. The auction is scheduled for Oct. 11 with bids due on Oct. 7, according to a notice posted on Tuesday on govsales.gov, which tracks government asset sales.
The auction comes about a month after the DOE put its $50 million green-energy loan to the Vehicle Production Group LLC on the block. The loan was later sold for $3 million.
"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," said Peter Davidson, executive director of the DOE's loan program office, in a blog post.
The auction of the Fisker loan will allow the DOE to exit its failed investment and pave the way for another group to gain control of the company.
Fisker won a $529 million loan from the DOE in 2009 under a U.S. loan program designed to promote advanced vehicles. But after Fisker missed performance targets, the DOE froze its credit line in June 2011 after Fisker drew down $192 million.
The company launched its flagship model, the $100,000-plus Karma plug-in hybrid sports car, in late 2011, but the launch was bedeviled by quality issues.
This year, Fisker missed payments on its DOE loan, fired most of its workforce in April and hired bankruptcy advisers. But investors have paid the company's day-to-day expenses, allowing the startup to avert bankruptcy while seeking a buyer.
Investors have been pushing the DOE to sell its Fisker loan for some time and at least three groups have sought to buy Fisker. As of this spring, their offers ranged from $20 million to as much as $30 million.
The groups include a Hong Kong-based group led by Fisker investor Richard Li and German investment group Fritz Nols AG. Chinese auto supplier Wanxiang Group and former General Motors executive Bob Lutz also joined forces to try to buy Fisker.
In his blog post, Davidson said the DOE has recouped $28 million from Fisker. He added that bidders for Fisker must submit business plans to promote U.S. manufacturing and engineering of advanced powertrain vehicles.
"The department will require all bids to include a commitment and business plan that promotes domestic manufacturing capabilities and related engineering for advanced technology vehicles here in the United States," he said.