Fisker Automotive fails to make loan payment

Troubled sports car maker Fisker Automotive Inc's failure to make a $10-million payment on a federal government loan yesterday, had tipped the Anaheim company closer to a bankruptcy reorganisation or liquidation.

The company was scheduled to start paying down around $192 million it had borrowed under the Energy Department's Advanced Technology Vehicles Manufacturing Loan Program.

The Energy Department said that on 11 April, it ''recouped the company's approximately $21 million reserve account -- funds that came from the company's sales and investors, not our loan -– and will apply those funds to the loan.''

The Los Angeles Times quoted an individual familiar with the process but not authorised to speak about Fisker's debt as saying that the government essentially swept the car company's account clean but now needed to wait to see if the automaker was sold or obtained new investor money before it could try to recoup more of the loan.

According to Aoife McCarthy, an energy department representative, given the obvious difficulties the company was facing, the department was taking strong and appropriate action on behalf of taxpayers.

She added, using the safeguards the energy department wrote into its loan agreements, the department stopped disbursing on the loan in June 2011 following the company falling short of the aggressive milestones that it had established as a condition of the loan. She added, as a result, while the original loan commitment of the department  was for $529 million, only $192 million was actually disbursed.

After taking the $21 million, the company still owed  the government $171 million.

Meanwhile, the company has been allowed by the Department of Energy to tap a reserve account for cash to pay the first installment on a federal loan that was due today, the department reported late this afternoon.

According to Delaware's economic development director, Alan Levin, Fisker owed the Department of Energy $20 million by today to satisfy a portion of its federal loan.

On 11 April, the department took the company's $21 million reserve account, which was funded by the company's sales and investors, not the loan, according to McCarthy.

She added, the department would apply those funds to the loan.

The impending deadline, combined with the company's financial woes, had raised speculation the company would be filing for bankruptcy today. However, no such bankruptcy filing had occurred.

Three years ago on 22 April, Fisker signed the two-part loan agreement with the US Department of Energy for a loan of $529 million to back its plans to build two lines of cars. The first part of the preliminary loan agreement stated that the first repayment of the first part of the loan would be due in three years.