Wilmington’s former GM plant is among the assets purchased in an auction of properties owned by the bankrupt Fisker Automotive Holdings Inc., which once planned to make its luxury hybrid-electric cars in the shuttered factory.
Wanxiang America Inc., the U.S. arm of China’s biggest auto parts maker, on Friday won the auction for Fisker’s assets, beating rival Hybrid Tech Holdings, an investor group controlled by Hong Kong billionaire Richard Li, with a bid of $149.2 million, consisting of $126.2 million in cash, $8 million in assumed liabilities, and a contribution of common stock in an affiliate designated to acquire the Fisker assets.
“We conducted a highly spirited auction resulting in an increase in value of approximately $90 million as compared to the opening bid of the auction,” said Marc Beilinson, Fisker’s Chief Restructuring Officer, in a statement.
Beilinson called the auction outcome a “great result” for all Fisker stakeholders, including Hybrid, which previously acquired a $168 million loan to Fisker from the U.S. Department of Energy, and for Fisker’s unsecured creditors.
Wanxiang said in court documents earlier that it could eventually produce a second generation of Fisker cars at the plant.
The result of the auction, which took place over two days at Fisker’s attorneys’ offices in New York, is subject to approval by a U.S. bankruptcy court judge at a hearing scheduled for Tuesday in Wilmington.
Fisker filed for Chapter 11 bankruptcy protection in November last year after safety recalls, missed sales and production targets, and shipments lost to Hurricane Sandy left it unable to meet its federal loan repayments.
The California-based company had hoped to build a new model at the Boxwood Road plant, a project that would have breathed new life into the old GM factory, and created thousands of jobs.
Delaware gave Fisker loans and grants totaling more than $21 million in 2009 when the company promised to create almost 2,500 jobs by 2015 by building cars at the plant. The state is now one of the creditors seeking repayment in the bankruptcy process.
Alan Levin, Director of the Delaware Economic Development Office, welcomed the auction result, calling Wanxiang a “well respected” company that has a history of operating many plants in the U.S.
“While nothing is final until approved by the court, DEDO will continue to talk with Wanxiang about its plans for Fisker and advocated for making the Boxwood Road facility an important part of the company’s future,” Levin said in a statement issued late Saturday.
Hybrid said in its own statement that it has “elected to retain its rights as a lender rather than continue to bid for ownership of Fisker.”
With its ownership of the former DOE loan, Hybrid said it is the senior secured creditor of Fisker – which drew down $192 million of a possible $529 million made available to Fisker to spur investment in clean-fuel cars.
Hybrid warned it will consider taking “all necessary steps and appropriate measures to protect its interests in this matter” and said it should be repaid ahead of unsecured creditors.
“After repayment of its debtor-in-possession financing and certain other costs incurred as part of the bankruptcy proceedings, Hybrid is entitled to be repaid ahead of the unsecured creditors on account of its security and, in relation to any assets that are ultimately determined to be unencumbered, will share in those assets together with all other creditors,” the company said.