Fisker shares halted after deal talks with big automaker collapse

By Akash Sriram and Zaheer Kachwala

(Reuters) -Fisker’s talks with a large automaker for a potential deal have collapsed, it said on Monday amid growing uncertainty for the cash-strapped startup that last week paused electric-vehicle production.

Trading in the shares of the company, which did not name the automaker with which it was in talks, has been halted pending an announcement.

The termination of talks has led the company to search for strategic options, including in- or out-of-court restructurings, and capital markets transactions, the company said.

“I can’t put it if it is next week or next year, but it is inevitable,” Thomas Hayes, Chairman at hedge fund Great Hill Capital, said on the growing chances of the company likely to file for bankruptcy protection.

Fisker also said it will be unable to meet a closing condition related to its attempt to raise up to $150 million in funding by selling convertible notes after missing an interest payment.

Raising funds has been hard for loss-making EV startups, which have little in way of revenue as they struggle to ramp up production and deliver to customers amid strong competition and a tough economy.

Separately, Fisker said it would ask investors to vote on a proposal for a reverse stock-split at a shareholder meeting on April 24, as it looks to maintain compliance with the Nasdaq’s listing norms.

Reuters had reported earlier this month that Nissan was in advanced talks to invest in the company.

But earlier in the day, the Japanese automaker held an event in which it announced a long-term business plan, including its EV strategy, and said it was looking for partners in the United States.

Fisker’s shares have lost more than 90% of their value this year, after the startup flagged going-concern risk in February and paused investments in future projects until it secured a partnership with an automaker.

It pivoted to a dealer-partner model earlier this year, after delivering less than half of the vehicles it made in 2023 due to logistics issues.

(Reporting by Zaheer Kachwala and Akash Sriram in Bengaluru; Editing by Shilpi Majumdar and Arun Koyyur)