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Fisker to Sell Assets in February Auction

NEW YORK ( The Deal) -- Fisker Automotive Holdings has won court approval to enter into two stalking-horse agreements as the electric vehicle maker moves to sell substantially all of its assets at a February auction.

Chief Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware in Wilmington on Thursday entered an order approving bidding procedures in connection with the sale of the debtor's assets.

According to the order, the Anaheim, Calif., debtor has declared the more than $35.25 million offer of Wanxiang America and the more than $55 million offer of Hybrid Tech Holdings LLC, both stalking-horse bids. The parties had jousted to lead bidding for Fisker, with the debtor proposing a private sale to Hybrid and the official committee of unsecured creditors putting Wanxiang forward as a lead bidder in an auction process.

Gross on Jan. 13 ruled Fisker would hold an auction, with Hybrid's ability to credit-bid capped at $25 million.

Under the approved bidding procedures, rival offers are due by Feb. 7 with a $5 million deposit. Bids must top at least one of the stalking-horse offers by at least $1.6 million, which consists of a $750,000 expense reimbursement for each stalking horse and a $100,000 initial bid increment.

Bids at a Feb. 12 auction must increase in increments of at least $100,000.

Gross is scheduled to consider the sale on Feb. 14.

Hybrid's offer includes the $25 million credit bid, $30 million in cash, the assumption of certain liabilities, $1.85 million in contributions and the modification of its debtor-in-possession financing to remove a lien on certain causes of action on the effective date of a Chapter 11 plan. Hybrid had said it would give unsecured creditors at least $5.5 million of the purchase price if the official creditors' committee supported Hybrid's bid to be stalking horse before the debtor made its decision on a lead bidder.

Wanxiang's offer includes $35.25 million in cash, the assumption of certain liabilities, 20% of the stock in the reorganized debtor and enough cash to pay off Hybrid's DIP loan up to a $9.14 million cap.

Hybrid on Nov. 22 spent $25 million to acquire at auction the U.S. Department of Energy's $168 million interest in a Fisker loan. Fisker filed for Chapter 11 the same day, toting a $79.73 million offer for its assets from Hybrid, which included a $75 million credit bid, the waiver of $4 million of the debtor's liability under a postpetition credit facility from Hybrid and $725,000 in cash payments in connection with a liquidation plan.

The committee on Dec. 30 then proposed a rival sale process and replacement DIP financing from Wanxiang, which on Jan. 29, 2013, acquired substantially all assets of A123 Systems Inc., the bankrupt maker of lithium-ion batteries for Fisker vehicles, in a $256.6 million deal.

The committee asserted its sale process would allow for higher offers than the Hybrid bid.

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