Wed, Apr 24, 2013 - Page 15 News List

Obama administration seizes US$21m from Fisker


The administration of US President Barack Obama has seized US$21 million from troubled automaker Fisker Automotive Inc just weeks after the company laid off three-fourths of its workers amid continuing financial and production problems.

Fisker had received US$192 million in federal loans, before a series of problems led US officials to freeze the loan in 2011.

In a statement on Monday, the US Department of Energy said it recovered US$21 million from the company’s reserve account on April 11 as it continues to seek repayment from the car maker for a 2009 loan commitment awarded by the Department of Energy.

A payment from Fisker was due on Monday, but was not made, a Department of Energy official said.

The payment deadline, combined with the company’s financial woes, had increased speculation that Fisker would file for bankruptcy as soon as Monday. No bankruptcy filing had occurred by late in the day.

The Department of Energy awarded the Anaheim, California-based company a US$529 million loan as part of an Obama administration program to boost electric cars and other advanced vehicles. Fisker pledged its assets as collateral on that loan.

A department spokeswoman called the financial seizure appropriate and noted that safeguards were written into the loan agreement. Combined with the 2011 action to freeze the loan, the department has protected more than two-thirds of its original loan commitment, spokeswoman Aoife McCarthy said.

“While this is a hard time for the company’s employees and investors, our overall portfolio of more than 30 projects continues to perform well and more than 90 percent of the US$10 billion loan loss reserves Congress established remains intact,” McCarthy said.

The Department of Energy has been criticized for failing to protect taxpayers from a failed US$529 million loan to solar panel maker Solyndra, which went bankrupt in 2011 and laid off 1,100 workers.

Fisker, maker of the US$100,000 Karma hybrid sports car, has not built a vehicle since last summer and has failed to secure a buyer as its cash reserves have dwindled.

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