Reuters: Regulatory News: UPDATE 1-US Energy Dep't recovers $21 mln from Fisker to repay loan

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UPDATE 1-US Energy Dep't recovers $21 mln from Fisker to repay loan Apr 22nd 2013, 22:57 Mon Apr 22, 2013 6:57pm EDT * DOE sweeps Fisker account for $21 mln to apply to loan * Fisker won $529 mln loan in 2009; Drew down $192 mln * Fisker did not pay loan payment due to DOE Monday * Announcement comes before congressional hearing on Fisker By Deepa Seetharaman April 22 (Reuters) - The U.S. Department of Energy recovered $21 million cash from cash-strapped Fisker Automotive that will go toward repaying nearly $200 million in loans extended to the automaker under a U.S. program to spur advanced vehicle development. The funds were recouped on April 11, DOE spokeswoman Aoife McCarthy said in a statement. The funds came from Fisker's sales and investors and will be applied to Fisker's outstanding loan. Before the DOE swept its account, Fisker had less than $30 million in cash on hand and was struggling to conserve enough cash to avoid breaching a covenant in its pact with the DOE. The announcement comes two days before the House Oversight and Government Reform Committee holds a hearing on the DOE's decision to award a loan to the automaker, which fired three-quarters of its staff earlier this month to conserve cash. Fisker owes the U.S. government about $192 million that was part of a $529 million loan that the automaker won in 2009 under the Advanced Technology Vehicles Manufacturing program. But in mid-2011, the DOE quietly froze Fisker's loan after the company fell short of several financial and sales targets. "Given the obvious difficulties the company is facing, we are taking strong and appropriate action on behalf of taxpayers," McCarthy said in a statement. "Using the safeguards we write into our loan agreements, the Department stopped disbursing on the loan in June 2011 after the company fell short of the aggressive milestones that we had established as a condition of the loan," she added. Fisker was not immediately available to comment on the DOE's announcement on Monday. In the last several months, a serious cash crunch has forced Fisker to take a series of steps to stay afloat, including a management overhaul and a search for a buyer in China. The company also hired law firm Kirkland & Ellis to prepare a possible bankruptcy filing. Fisker was expected to make a payment on the DOE loan on Monday. A DOE official said the company did not make that payment, which two sources said was around $10 million. The DOE and Fisker have not confirmed that figure. Henrik Fisker, who helped found the company and abruptly resigned from Fisker last month, will testify at the April 24 hearing titled "Green Energy Oversight: Examining the Department of Energy's Bad Bet on Fisker Automotive." Co-founder Bernhard Koehler will also give testimony. Link this Share this Digg this Email Reprints

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