Troubled green carmaker Fisker seeks to raise more cash

Aug 15, 2012, 9:08 PM EDT
REUTERS/Ints Kalnins/Files


By Sarah McBride and Deepa Seetharaman

SAN FRANCISCO/DETROIT, Aug 15 (Reuters) - Fisker Automotive,the maker of the $100,000-plus Karma hybrid sports car, aims toraise about $150 million in additional funds to tide the companyover un t il it can launch production of its second model, a keyinvestor said on Wednesday.

The company has already raised more than $1 billion inprivate financing from venture backers and others since itsfounding in 2007. But earlier this year, Fisker was deniedaccess to more than half of a $529-million government loan thatwas the cornerstone of its business plan.

"We need money on our balance sheet" to fund operatingexpenses, said Ray Lane, a Fisker director and a managingpartner at venture firm Kleiner Perkins Caufield & Byers. "Andwe need money to fund the development of the next car."

Although it has raised more than $400 million in venturefunds in the past 12 months, Fisker needs at least another $150million to reach breakeven and may go back to investors again in2013 for more money, Lane said in an interview.

"We're raising some of that money now, and some later," hesaid, declining to say how much the company would need in total.

Once Fisker breaks even, the company could pursue an initialpublic offering or a sale to a strategic investor, which couldcome in late 2013, Lane said.

Fisker originally had planned to replace itsgovernment-backed loan with high-yield debt plus equity, butshelved that plan in favor of simply raising more equity, Lanesaid.

Fisker spokesman Roger Ormisher declined to comment on thecompany's financial plans.



In 2009, Fisker was among the few automakers to receive aU.S. Department of Energy loan as part of a broader governmentpush to add U.S. jobs and promote green technology. Under adifferent government effort, Fisker's battery supplier A123Systems received a $249-million green-technology grant.

But both companies have struggled in recent months. Fiskerhas faced a series of quality and financial setbacks involvingits flagship vehicle, the Karma plug-in hybrid, and delays inthe development of its second hybrid model, the Atlantic sedan.

The automaker, based in Anaheim, California, had planned tobuild the Atlantic at a former General Motors Co plant inDelaware, the home state of Vice President Joseph Biden. It hadcounted on using money from the DOE loan to retool the plant andget it ready for production in 2013.

In the meantime, Fisker has experienced a small number ofhigh-profile car fires, the most recent one last week inWoodside, California. E a rlier this week, Fisker named its thirdchief executive this year.

A123, which had run short of cash, said last week that itplanned to sell a controlling stake to Chinese auto parts makerWanxiang for $450 million.

Fisker has raised $1.01 billion from more than 100 ventureinvestors over the past five years, according to companydocuments filed with the U.S. Securities and ExchangeCommission.

After a rocky start and several delays, Fisker has delivered2,000 Karmas, Lane said. He drives one, as do actor LeonardoDiCaprio and singer Justin Bieber.