WILMINGTON, Del (Reuters) - A unit of China’s Wanxiang Group received U.S. bankruptcy court approval on Tuesday to buy the assets of Fisker Automotive, a defunct manufacturer of plug-in hybrid sports cars that was funded in part with a U.S. government loan.
Wanxiang America Corp, an affiliate of China’s largest auto parts company, bid $149.2 million for Fisker in a three-day auction that pitted it against Hybrid Tech Holdings.
“I‘m very pleased to approve the sale,” said Kevin Gross, the U.S. bankruptcy judge in Wilmington, Delaware, who is overseeing Fisker’s Chapter 11 bankruptcy.
The auction for Fisker has been dubbed a battle of Chinese billionaires, with Wanxiang’s founder Lu Guanqiu squaring off against Richard Li of Hong Kong, who controls Hybrid. Bidding had started at $55 million.
At the center of the fight is Fisker, which ceased production of its elegant $100,000 sports cars in 2012 to save cash after a series of tech glitches and cost overruns.
“We are delighted that our client prevailed at the auction, and we look forward to completing the next step in this process,” said Bojan Guzina, a Sidley Austin attorney who represents Wanxiang.
The company said in court papers it could restart production in the coming months, estimating that it would sell more than 1,000 Karma hybrids in the first 18 months in the United States and 500 in Europe.
Wanxiang bought Fisker’s battery supplier, A123 Systems LLC, last year through a similar bankruptcy sale, and said it could lower production costs.
A123 and Fisker were both recipients of a controversial U.S. Department of Energy loan program meant to support clean energy technology.
Fisker was approved to borrow up to $529 million, in part to support the company’s efforts to revive a former General Motors plant in Delaware.
Li bought that loan late last year for $25 million. He planned to forgive some of the $168 million balance on the loan in return for the company’s assets, a process known as credit bidding.
However, in January, Gross capped the credit bid at the $25 million paid for the loan, a ruling that Li’s lawyers criticized as “radical.”
Tuesday’s hearing did not resolve who would benefit from the sale of Fisker. Lower-ranking unsecured creditors have already challenged Li’s ability to be paid first, based on the outstanding balance on the government loan.
Unsecured creditors have also sought to sue Li, a former Fisker director, for pushing Fisker into bankruptcy and then trying to seize the assets on the cheap.
The case is In re Fisker Automotive Holdings Inc, U.S. Bankruptcy Court for the District of Delaware, No. 13-13087.
Reporting by Tom Hals in Wilmington, Delaware; Editing by Jan Paschal