Fisker Receives $100 Million for Development of Atlantic

In April, Tom LaSorda--then CEO of Fisker Automotive--said the company was raising additional capital.

Today, Fisker announced that it had closed a new round of financing, with more than $100 million coming into the company's coffers.

It will use the money, it says, for "continued product development, market expansion, and a new global marketing campaign for the Fisker Karma."

The product development work will be for the Fisker Atlantic, the company's second and more affordable car, after it shelved plans for the Surf and Sunset models of the larger Karma.

The mid-size Atlantic sedan was unveiled at the New York Auto Show, in April, and is expected to sell for around $50,000.

The "market expansion" will include both continued sales of its $106,000 Karma range-extended electric luxury sedan, and expansion into new markets, both in China and the Middle East.

Thus far, Fisker has built about 2,000 Karma sedans, after repeated schedule delays, recalls and customer upgrades, and--most recently--a recall for a faulty cooling fan that may have led to two separate fires in customer cars.

The company said in its announcement of the financing that it has delivered "nearly 1,500" Karma sedans to buyers in the U.S. and Europe.

The 2012 Fisker Karma has received mixed reviews, with compliments for its styling but criticism for its interior volume, inefficient powertrain, and frequent quality glitches.

Last week, Consumer Reports delivered a stinging review of the Karma, calling it "full of flaws" and deeming its touchscreen controls an "ergonomic disaster."

Fisker appointed a new CEO, Tony Posawatz, in August; one of his highest priorities has clearly been closing the current round of financing to keep the company solvent.

"We are grateful to both our investors and our initial customers," Posawatz said, noting that both groups "have supported our company and are quickly becoming our biggest advocates.”

2012 Fisker Karma during road test, Los Angeles, Feb 2012

Posawatz pledged to announce both production plans and a timeline for the Fisker Atlantic by the end of this year.

Since it was founded in 2007, Fisker has raised more than $1.2 billion in private investment.

It also borrowed $193 million in low-cost loans granted under the U.S. Department of Energy's advanced-technology vehicle manufacturing initiative.

The company was originally approved for $529 million of loans in September 2009, but funds were frozen by the DoE in early 2011 after Fisker repeatedly failed to meet milestones and deadlines in the loan agreement.

Since that time, Fisker has garnered more than $600 million of investment, almost half of which came after the Karma went on the market last December.

What remains unclear are the terms of the new financing.

Just six weeks ago, Fisker was reported to be seeking $150 million--and it was rumored that the new money would be a "down round," or raised at a lower valuation than previous rounds.

To raise that money, board chairman and venture capitalist Ray Lane told several media outlets that FiskerAutomotive might attempt an initial public offering (IPO) in 2013.

Source: Green Car Reports