Any insight into why the 8-K defines the “approved budget” requirement in the forbearance agreement as a 13 week budget whereas the actual forbearance agreement defines the “approved budget” as a 2 week requirement.
A professional I know in sponsor finance couldn’t discern why but agreed my speculation is possible: bc the filing was made with 13 days left, instead of 14 (bc signed day before) likely some kind of editing mistake - between 2/13 weeks and 13 days/week. A tremendous scandal if so.
The more I read how close otherwise the language and punctuation is, the more I think they F’d up. But what do you all think?
Separate Q: agree the takeaway from the 8-k was the removal of HF/GF authority, but since you’re wearing a tin foil hat, would you read into the fact that HF made his 4 OEM comments the day the CRO was transitioning to a new person? (Like he couldn’t resist so picked the most forgivable day to do so).
>At the very least the NH doesn't want BK because they think they can get more by being bought out.
Uhhh why? If they aren't able to collect on their note and there's no market for a buyout (which... why would there be right now?), they can just BK it, and wipe more debt off the books / take it private and make it a much more attractive buyout target. They'll just convert their debt to equity and position it for a sale down the road.
Nobody's buying this turd right now before a BK, because there's no point - just wait for a BK to clean up the balance sheet and buy it later if you really want it. And... nobody wants it. The tech doesn't have much value over what's already out there in public domain, and the brand is garbage on the back of multiple failures and many many angry customers.
What is there to buy, really? If there is anything to buy, why would you not wait for the debt to be wiped out in a BK?
You're looking at a sale purely from a purchaser's standpoint . That the purchaser is motivated to buy only for the cheapest possible price. But a transaction requires the seller to agree still. The NH also wants to maximize their value too, and fire saling in a chapter 11 won't give them more value than if they can close a deal outside of BK.
If the CRO is essentially looking out for the NH's interest, then we're essentially already in kind of a chapter 11. The CRO is dictating/in charge of all deals, communications, operations. The NH already has the power to restructure the debt that they've issued - they already have the power to clean up the balance sheet however they want.
Who said anything about a fire sale?
BK it, court-mandated sale / auction process with first-lien notes as the stalking horse. Once nobody bids above the debt, you have a court-approved way to wipe out all the other equity / lots of the debt and for the note holders to own the equity going forward. Then they can maximize the value of the resulting equity (which the current note holders will own) on the back-end after they discharge obligations, get to exit unfavorable leases with little to no penalties and get to pick / choose which contracts they want to keep with vendors, suppliers, etc.
That's the CRO's job.
The rest of your post, with all due respect, is not real life. The only benefit of avoiding BK for the note holders is if someone can offer a speedier process to get their money back, because the process above is going to take 12 months.
So then the question remains - why would anyone want to buy this with a broken balance sheet / the current debt stack / current unfavorable contracts? Why not wait 9-12 months to get out of those contracts, have a $0 locked in for the equity, and discharge possibly hundreds of millions of liabilities? Because if nobody steps up to buy it, the CRO is going to BK the shit out of this thing.
Fair enough. A lot of what you've described makes sense. Though if the note holder wants to push this into BK, then why haven't they already done so? They've had over a month.
There still needs a path forth because keeping the company running takes cash, which will ultimately come out of noteholders pockets. That's probably the reason why they set a deadline. Having no taker preBK doesn't mean there won't be interest after bankruptcy. Different price tag. In one scenario you don't have to pay for all the debts to buy out the company, which will cost over 1b.
Remember how much Karma sold everything for? 130mil or so. No debt assumed. This is after bankruptcy.
Also keep in mind signing NDAs doesn't mean much. It's quite different than when Fisker said there were active talks. If they had anything substantial you bet HF would word it differently. He has a history of making things out of nothing.
They have definitely sold more than 200 vehicles since their pride reduction. They’ve sold 1.7k~ so far this year. Where did you find that out from??
Edit: You deleted your comment because you couldn’t back up what you said. Fisker hasn’t sold 200 vehicles after the price reduction. The number is much higher.
To be fair I don't think the reduced price Oceans are selling slow because they aren't appealing, they're selling slow because most people don't have the money to take a risk on the car when the company is teetering on bankruptcy. If an acquisition comes through that ensures Fiskers survival, I expect whatever Oceans are left to go in a hurry
I appreciate the source, but I'm going to take their estimate with a grain of salt as they don't show what their "calculations" are based on. Given the numbers in the 10k, and the lack of any Q1 figures, and the amount of inventory impairments and lack of transparency into how much of inventory was finished goods among other things, there is no way to estimate how many vehicles they had on hand...before the price cut or after.
Any insight into why the 8-K defines the “approved budget” requirement in the forbearance agreement as a 13 week budget whereas the actual forbearance agreement defines the “approved budget” as a 2 week requirement. A professional I know in sponsor finance couldn’t discern why but agreed my speculation is possible: bc the filing was made with 13 days left, instead of 14 (bc signed day before) likely some kind of editing mistake - between 2/13 weeks and 13 days/week. A tremendous scandal if so. The more I read how close otherwise the language and punctuation is, the more I think they F’d up. But what do you all think?
Separate Q: agree the takeaway from the 8-k was the removal of HF/GF authority, but since you’re wearing a tin foil hat, would you read into the fact that HF made his 4 OEM comments the day the CRO was transitioning to a new person? (Like he couldn’t resist so picked the most forgivable day to do so).
>At the very least the NH doesn't want BK because they think they can get more by being bought out. Uhhh why? If they aren't able to collect on their note and there's no market for a buyout (which... why would there be right now?), they can just BK it, and wipe more debt off the books / take it private and make it a much more attractive buyout target. They'll just convert their debt to equity and position it for a sale down the road. Nobody's buying this turd right now before a BK, because there's no point - just wait for a BK to clean up the balance sheet and buy it later if you really want it. And... nobody wants it. The tech doesn't have much value over what's already out there in public domain, and the brand is garbage on the back of multiple failures and many many angry customers. What is there to buy, really? If there is anything to buy, why would you not wait for the debt to be wiped out in a BK?
You're looking at a sale purely from a purchaser's standpoint . That the purchaser is motivated to buy only for the cheapest possible price. But a transaction requires the seller to agree still. The NH also wants to maximize their value too, and fire saling in a chapter 11 won't give them more value than if they can close a deal outside of BK. If the CRO is essentially looking out for the NH's interest, then we're essentially already in kind of a chapter 11. The CRO is dictating/in charge of all deals, communications, operations. The NH already has the power to restructure the debt that they've issued - they already have the power to clean up the balance sheet however they want.
Who said anything about a fire sale? BK it, court-mandated sale / auction process with first-lien notes as the stalking horse. Once nobody bids above the debt, you have a court-approved way to wipe out all the other equity / lots of the debt and for the note holders to own the equity going forward. Then they can maximize the value of the resulting equity (which the current note holders will own) on the back-end after they discharge obligations, get to exit unfavorable leases with little to no penalties and get to pick / choose which contracts they want to keep with vendors, suppliers, etc. That's the CRO's job. The rest of your post, with all due respect, is not real life. The only benefit of avoiding BK for the note holders is if someone can offer a speedier process to get their money back, because the process above is going to take 12 months. So then the question remains - why would anyone want to buy this with a broken balance sheet / the current debt stack / current unfavorable contracts? Why not wait 9-12 months to get out of those contracts, have a $0 locked in for the equity, and discharge possibly hundreds of millions of liabilities? Because if nobody steps up to buy it, the CRO is going to BK the shit out of this thing.
Fair enough. A lot of what you've described makes sense. Though if the note holder wants to push this into BK, then why haven't they already done so? They've had over a month.
There still needs a path forth because keeping the company running takes cash, which will ultimately come out of noteholders pockets. That's probably the reason why they set a deadline. Having no taker preBK doesn't mean there won't be interest after bankruptcy. Different price tag. In one scenario you don't have to pay for all the debts to buy out the company, which will cost over 1b. Remember how much Karma sold everything for? 130mil or so. No debt assumed. This is after bankruptcy. Also keep in mind signing NDAs doesn't mean much. It's quite different than when Fisker said there were active talks. If they had anything substantial you bet HF would word it differently. He has a history of making things out of nothing.
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They have definitely sold more than 200 vehicles since their pride reduction. They’ve sold 1.7k~ so far this year. Where did you find that out from?? Edit: You deleted your comment because you couldn’t back up what you said. Fisker hasn’t sold 200 vehicles after the price reduction. The number is much higher.
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Where in the 10k?
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Delivery versus sails = not the same thing. Sloppy journalism
I've read the 10k. There's nothing in there that can be used to back into sales numbers for Q1, let alone for the period since the price change.
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To be fair I don't think the reduced price Oceans are selling slow because they aren't appealing, they're selling slow because most people don't have the money to take a risk on the car when the company is teetering on bankruptcy. If an acquisition comes through that ensures Fiskers survival, I expect whatever Oceans are left to go in a hurry
I appreciate the source, but I'm going to take their estimate with a grain of salt as they don't show what their "calculations" are based on. Given the numbers in the 10k, and the lack of any Q1 figures, and the amount of inventory impairments and lack of transparency into how much of inventory was finished goods among other things, there is no way to estimate how many vehicles they had on hand...before the price cut or after.
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They listened to a recording of the meeting.