Fisker Automotive laid off three quarters of its staff today to avoid bankruptcy while it seeks an angel with big bucks to help it become operational again.
The maker of the luxury hybrid Karma says it has “at least” $30 million in cash, and $15 million more due after settling a claim this week with its bankrupt battery maker A123 Systems, according to Reuters.
But the company owes $192 million on a $193 million Department of Energy “green” loan. It was supposed to receive $529 million, but the DOE declined to pay the full amount in May 2011 after Fisker fell behind on its targets. Executives who kept their jobs are trying to renegotiate a $10 million loan payment due on April 22.
The auto maker’s public relations team was part of the layoffs, but an outside PR firm said in a statement Fisker is still seeking a “buyer or strategic partnership” but couldn’t afford to keep on the majority of its workforce, according to Fox News.
“[T]he Company regrets having to terminate any of its hardworking and talented people,” the statement said. “But this was a necessary strategic step in our efforts to maximize the value of Fisker’s core assets.”
A former employee told Reuters the company also said it can’t afford severance payments.
The company stopped manufacturing its $100,000 Karma in July 2012 and has faced a string of troubles, including recalls and problems with its lithium ion batteries. Founder Henrik Fisker resigned in March over disagreements with management.
Fisker’s search for a buyer has also gone south. Chinese companies Dongfeng Motor Group and Zhejiang Geely Holding Group both balked at the terms of its loan agreement with the DOE, according to Reuters. The auto maker recently hired restructuring lawyers at Kirkland & Ellis LLP in case it can’t find an investor or strategic partner to help keep it afloat.