In this economy, it isn’t just students and homeowners who are having trouble paying back their loans. In a statement on Monday, the US Department of Energy said that it had seized $21 million from Anaheim, California-based electric car maker Fisker Automotive, Inc. on April, 11. The DOE said that it will continue to seek repayment from a loan agreement made back in 2009. A payment was due this week, but was not met. This decision came several weeks after the company laid off three-quarters of its workers and had part of its $529 million loan frozen back in 2011.
Fisker had received $192 million of its $529 million loan before financial troubles began to besiege the company. The DOE had awarded the money as part of the administration’s plan to boost the production and development of electric vehicles. The company, which makes the $100,000 Karma hybrid sports car assembled in Finland had not built anything since last summer, and only sold 2,000 of its luxury vehicles.
Missing the payment deadline on Monday in combination with its other financial woes, the DOE decided to take back the rest of its funds. The move came partly in a fear that the Fisker would potentially file for bankruptcy, an action that echoed the problems faced by Solyndra. Fisker had set its assets as collateral for the loan. Aoife McCarthy, a spokeswoman from the DOE said that the actions by the government were in line with the safeguards written into the agreement.
“While it 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 $10 billion loan loss reserves Congress established remains in tact,” she said.
The DOE still retains about two-thirds of the original loan. The Republican-controlled House of Representatives is set to hold a hearing before a subcommittee named “Green Energy Oversight: Examining the Department of Energy’s Bad Bet on Fisker Automotive” this week. Meanwhile, it is yet to be seen whether the company will be sold or will try to raise money from new investors.