(Reuters) – Fisker said on Monday it would pause production of its electric vehicles for six weeks and raise up to $150 million in funding by selling convertible notes after missing an interest payment, as the startup tries to navigate a cash crunch.
The company added that none of its Ocean SUVs were produced in January, while its manufacturing partner Magna’s Austrian unit made about 1,000 vehicles between Feb. 1 and March 15.
Fisker delivered about 1,300 vehicles in 2024 and the value of inventory of completed vehicles was more than $200 million, according to the company.
The senior secured convertible notes will have a 10% original issue discount for gross proceeds of up to $150 million.
The notes are being sold to CVI Investments, which is working through Heights Capital Management, and the Warsaw-based investment fund can convert the debt into equity in Fisker, the EV firm said in documents filed with the U.S. Securities and Exchange Commission.
Fisker said it did not make the $8.4 million interest payment on March 15 for some convertible notes due 2026 despite having enough liquidity, as it wanted to take advantage of a 30-day grace period to talk to its investors about its capital structure.
As of Friday, the company’s balance of cash, cash equivalents and restricted cash was $120.9 million, down from $395.9 million at the end of last year.
Fisker reiterated on Monday that it was in talks with a large automaker for a potential transaction, but did not name the company.
Reuters reported earlier this month that Nissan was in advanced talks to invest in the company in a deal that could act as a financial lifeline for the cash-strapped EV startup.
Earlier this year, Fisker started to transition its sales strategy from a direct-to-customer model to leaning on dealers to sell cars as it faced issues with distribution and servicing.
The company flagged substantial doubt about its ability to continue as a going concern in February and paused investments in future projects until it secured a partnership with an automaker.
Reporting by Akash Sriram in Bengaluru; Editing by Shounak Dasgupta
