U.S. electric truck manufacturer Nikola has voluntarily filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.
The company cited significant cash losses and difficulties in raising funds over the past fiscal year, according to a statement released on Wednesday.
The firm, along with its HYLA brand, conducted a thorough review of all available and credible alternatives to find a solution that would allow it to continue operations.
However, after months of active searching, Nikola determined that a structured sale process was the best way to maximize the value of its assets.
The company intends to market and sell all, or nearly all, of its assets and conduct an orderly wind-down of its business.
If approved by the court, the proposed bidding procedures would allow interested parties to submit binding offers to acquire Nikola’s assets, free of debt and certain liabilities.
The firm enters Chapter 11 with approximately 47 million dollars in cash to fund prior activities, implement the post-petition sale process, and exit Chapter 11 through a structured plan.
Given its liquidity profile and projected case expenditures under Chapter 11, Nikola plans to seek court approval for a sale timeline that balances its liquidity needs with its extensive pre-petition marketing efforts to better position the company and maximize shareholder value.
“Our customers have accumulated approximately 3.3 million fleet miles on our FCEV and BEV truck platforms, and our HYLA refueling network has distributed over 330 metric tons of hydrogen. Like other companies in the EV industry, we have faced various macroeconomic and market factors that have impacted our ability to operate,” says Steve Girsky, President and CEO at the company.
He adds that in recent months, the company has taken numerous steps to raise capital, reduce liabilities, strengthen its balance sheet, and preserve cash to sustain operations.
“Unfortunately, despite our best efforts, we have been unable to overcome these significant challenges, and the Board has determined that Chapter 11 is the best path forward under these circumstances for the company and its stakeholders,” Girsky states.
Nikola now joins other U.S. companies, such as Fisker, that have filed for bankruptcy in recent years due to difficulties in securing financing amid higher interest rates and a decline in EV demand.
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