Fisker to raise additional capital as cash burn continues

July 10, 2023 04:57 AM PDT | By Invezz

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Fisker to raise additional capital as cash burn continues — Image source: Invezz

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Fisker Automotive (NYSE: FSR), an upcoming electric vehicle company is raising additional capital to boost its balance sheet. In a statement, the firm said it was selling $340 million of 0% senior unsecured convertible notes due 2025. According to its statement, the company left the option of raising the principal to $690 million.

In addition, the company also granted the investors the right to buy $226 million of notes in the six months. The new notes offering will expire on July 11th. In a note, the company said that the funds will go to boost its working capital as its manufacturing continued.

Fisker, a company valued at over $1.9 billion, needs these funds since it started manufacturing its vehicles recently. In a recent statement, the company said that it had produced 1,022 Fisker Ocean vehicles in the second quarter. It now hopes to start ramping up production this month.

The most recent results showed that Fisker had over $654 million in cash at the end of the first quarter. Its cash hoard has dropped from over $1.4 billion in 2021. Therefore, the cash raise is needed since the cash burn is expected to continue rising.

Unlike EVs, Fisker Automotive does not manufacture its vehicles itself. Instead, the company has partnered with Magna Steyr, an Austrian firm that.

Fisker stock price dropped by 3.50% in the pre-market trading. It has fallen by 33% in the past 12 months while the short interest has jumped to 39%. This means that many people expect the shares to continue falling in the near term.

The post Fisker to raise additional capital as cash burn continues appeared first on Invezz.

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