After Fisker recently made the headlines again and again because of its financial difficulties, the next piece of bad news follows: The NYSE is starting to delist the Fisker securities.
• Fisker has been fighting for survival for several weeks
• Negotiations with possible rescuer failed
• NYSE begins delisting Fisker shares
Fisker in trouble
The electric car manufacturer and Tesla competitor Fisker has recently attracted increasing attention due to its financial difficulties. The company is struggling with fierce competition, product quality and a decline in demand for electric vehicles. Bankruptcy of the company cannot be ruled out. In early March, Fisker issued a “going concern” warning, saying there were significant doubts about its ability to continue as a going concern. In the meantime, news gave hope that Fisker was “in serious negotiations with a major automobile manufacturer” about joint production and use of the dealer network. It is said to have been the Japanese car manufacturer Nissan.
Fisker stock suspended from NYSE trading on Monday
However, on Monday, MarketWatch reported that negotiations had broken down. The company is said to have stated this in a filing with the US Securities and Exchange Commission (SEC). Fisker is now examining further “strategic alternatives”, which would also include “intra- or extra-judicial restructuring”, as well as capital market transactions, buybacks and possible share issues. “These alternatives involve significant uncertainties and there can be no assurance that any of these discussions will be successful or that funds will be available to the Company under the commitment,” the letter apparently said.
Investors reacted extremely negatively to the bad news. Fisker shares temporarily fell 28.17 percent to $0.0897 in NYSE trading on Monday. As trading continued on Monday, trading in Fisker securities was even suspended.
NYSE prepares to delist
As MarketWatch now reports, the New York Stock Exchange announced on Monday that it would begin the delisting process for Fisker’s shares. According to the EV manufacturer, this will lead to a “default event” for some convertible bonds. The company expects its securities to be listed over-the-counter on the OTC Pink platform or another market operated by the OTC Markets Group.
The NYSE cited Fisker’s “unusually low” share price in a statement and said trading in the stock would cease immediately, according to MarketWatch.
Fisker said in a filing shortly thereafter that the delisting would trigger an offer to repurchase the 2.5% unsecured convertible notes due 2026 as well as “an event of default under our 2025 senior secured convertible notes due 2025, allowing holders of the 2025 notes due 2025 to do so would call these bonds due early and pay them immediately in full.
“We currently do not have sufficient cash reserves or sources of financing to pay all amounts due under the 2026 Notes or the 2025 Notes and, as a result, such events could have a material adverse effect on our business, results of operations and financial condition,” it also said in the submission.
Editorial team finanzen.at
Image source: T. Schneider / Shutterstock.com