* Geely put off by U.S. govt conditions attached to Fisker
* Geely was favoured winner of Fisker stake; Dongcheng
submitted bids last week
* Geely decision not linked to Fisker founder's
By Norihiko Shirouzu
SHANGHAI, March 18 China's Zhejiang Geely
Holding Group will not bid for a majority stake in
Fisker Automotive Inc. mainly due to the troubled U.S. electric
car maker's obligations to the U.S. government, according to two
sources familiar with the matter.
Geely, the owner of Sweden's Volvo, had been favoured to win
the deal for the cash-strapped Anaheim, California-based plug-in
hybrid maker, which had hoped to finalise the sale by mid-March.
The Chinese firm was mainly put off by the conditions the
U.S. Department of Energy (DOE) had placed on Fisker when
granting a $529 million loan, which the sources said included an
obligation to restore capacity and jobs at the firm's Delaware
plant according to a schedule imposed by the U.S. government.
"Those obligations are too complicated to handle and seem
too risky," one of the sources said. "The plan's footprint was
too big. It would take a long, long time to fill up the plant
with products and restore employment there."
The sources declined to be identified because of the
confidential nature of the deal. Geely did not immediately
respond to a request for comment. Fisker was not available
outside U.S. regular business hours.
The decision was not related to last week's resignation of
Fisker's founder and executive chairman, the sources said.
Henrik Fisker quit over what he called major disagreements with
the automaker's top executives over business strategy.
DONGFENG MOTOR IN THE BIDDING
Geely was interested in Fisker partly due to the Delaware
factory previously owned by General Motors Co. The
Chinese firm was keen on the plant as it wants to boost demand
for its Volvo cars in the United States and is interested in
producing Volvo cars there.
Fisker has not produced a car since July and is seeking a
financial backer to help build its second model, the Atlantic
Dongfeng Motor Group Co. was competing for the
Fisker stake with Geely, and the sources said the Chinese
state-owned company had submitted its final offer late last
Dongfeng Motor was not immediately available to comment and
it was not immediately clear whether Fisker would automatically
pick the company as the winner.
Any merger deal that Fisker undertakes must be approved by
the DOE, according to the 2009 loan's conditions.
Any deal is likely to involve another Chinese company,
Wanxiang Group, an auto parts maker that purchased bankrupt U.S.
lithium-ion battery maker A123 Systems, Fisker's
primary battery supplier. A Wanxiang executive declined to