Transportation vehicle manufacturer Nikola Corporation has filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. This decision marks the beginning of an auction and sale process under Section 363 of the United States Bankruptcy Code, with the goal of maximizing the value of its assets.
The start of the comprehensive sale process of Nikola Corporation
The company has asked the Court for permission to pursue a number of customary “first day” motions to allow it to continue limited operations, including permission to fulfill its employee obligations during the sale process. It also intends to continue certain service and support operations, as well as fueling activities under its HYLA brand, through the end of March 2025.
With approximately $47 million in cash, Nikola plans to fund the above activities, implement the sale process and exit Chapter 11 through a planning process. “With the dedication of our employees and the support of our partners, Nikola has taken significant steps to advance zero-emission transportation, including bringing to market the first commercially available Class 8 hydrogen fuel cell electric trucks in North America,” said Steve Girsky, Nikola’s president and CEO.
Despite efforts to raise capital and reduce liabilities, multiple macroeconomic and market factors have impacted the Company’s ability to operate. The Board has determined that Chapter 11 represents the best possible path forward under these circumstances.
Nikola, together with its financial and legal advisors, conducted a thorough analysis of all available alternatives to maintain its operations. After months of active research, it was concluded that a structured sale process is the best option to maximize the value of the company’s assets. The company intends to market and sell all, substantially all, or a portion of its assets, carrying out an orderly wind-down of its businesses.
The proposed tender procedures, if approved by the Court, would allow interested parties to submit binding offers to acquire Nikola’s assets, free and clear of debt and certain liabilities. Interested parties may include both strategic and financial buyers, who will have extensive due diligence documentation.
For more information regarding this proceeding and the proposed asset sale , interested parties may visit the website of Epiq Corporate Restructuring, LLC, the Debtors’ notice and claims agent. Nikola’s legal counsel is Pillsbury Winthrop Shaw Pittman LLP and Potter Anderson & Corroon LLP, its investment banker is Houlihan Lokey Capital, Inc., and its financial advisor is M3 Partners.
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Source and photos: Nikola
