Fisker (OTCMKTS:FSRN) has a forbearance period deadline coming up on the earlier of May 17 or the occurrence of a forbearance default. The details behind the deadline are quite complicated, so let’s start from the beginning.
On March 25, the New York Stock Exchange informed Fisker that it had decided to suspend FSR and begin proceedings to delist the stock. On April 2, Fisker defaulted on its 2025 notes due to being suspended from the NYSE for five consecutive trading days.
As a result of the default, the owner of the notes invoked the right to “accelerate the 2025 Notes by requiring the Company to immediately redeem 100% of the outstanding 2025 Notes at the Event of Default Redemption Price, including any other amounts due under the 2025 Notes.” The shareholder delivered an event of default redemption notice to Fisker on April 4.
Fisker Stock: Forbearance Period Extended to May 17
Afterward, the owner and Fisker agreed to enter into a forbearance agreement that would waive the shareholder’s right for redemption at the default redemption price and “forbear from exercising any of its other default-related rights and remedies against the Company and the other Obligors.” This period began on April 4 and ended on April 21.
On April 21, the two parties then entered into a new forbearance agreement that extended the forbearance period to the earlier of May 1 or the occurrence of a forbearance default.
May 1 came along and Fisker was still unable to pay 100% of the outstanding 2025 Notes at the event of default redemption price. On May 7, the two parties entered into Amendment No. 1 of the forbearance agreement that extended the forbearance deadline to the earlier of May 17 or the occurrence of a forbearance default. Fisker has also agreed to provide the note holder with a “three-week budget and cash flow forecast.”
It isn’t looking too good for Fisker, as the company is unable to make debt payments. For now, it seems as though the electric vehicle (EV) company is banking on an acquisition.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
