Electric trucking startup Nikola is hoping to promote what stays of its complete enterprise as early as April, legal professionals for the corporate advised a decide Thursday through the first listening to of its chapter case in Delaware.
The legal professionals claimed Nikola already has a minimum of three consumers (who they didn’t title) and that the corporate hopes to solicit different bids, with a submission deadline doubtless in late March.
If Nikola can’t discover a purchaser prepared to tackle the entire enterprise, the corporate will pivot to promoting off its property in items in an try to fulfill greater than $1 billion in liabilities. (Nikola claims between $500 million and $1 billion in property.)
The listening to was held simply sooner or later after Nikola filed for Chapter 11 chapter safety and introduced it could not function as a standalone enterprise, bringing an finish to an organization that has been plagued with drama after its founder Trevor Milton was convicted on a number of counts of securities fraud.
Nikola had been attempting to promote itself for months, a few of the early chapter filings and legal professionals’ statements present.
In a sworn declaration, CEO Stephen Girsky mentioned Nikola labored with Goldman Sachs and solicited 22 potential acquirers within the truck manufacturing and transportation logistics areas. Two “worldwide automotive
producers expressed curiosity” in a transaction, based on Girsky. One dropped out. Nikola additionally exchanged “varied time period sheets” with the opposite till that social gathering additionally walked away in late 2024.
After that failed, Nikola labored with legislation agency Houlihan Lokey to solicit 24 monetary traders to “gauge potential curiosity in each a standalone funding and an funding alongside a possible strategic companion.” The suggestions, although, was that it could require an excessive amount of cash to show Nikola’s nascent enterprise round, based on Girsky.
In December 2024, Nikola wound up in discussions with one other “worldwide automobile manufacturing firm” a few potential acquisition, going by means of what Girsky described as “substantial due diligence” over a four-week interval. But the possible purchaser “in the end walked away,” which Girsky famous was a “disappointing conclusion.”
Now in chapter, Girsky advised the courtroom Nikola is in “lively discussions with a minimum of three” events involved in shopping for the corporate outright, and that they’re additionally advertising and marketing a few of its highest-value property for potential gross sales, such because the manufacturing facility in Coolidge, Arizona.
Chazz Coleman, a lawyer representing Nikola within the chapter case, mentioned he expects the case and the sale course of to be “uneventful and clean.”
Nikola will proceed to solicit curiosity till round March 27, the primary proposed date for a bid submission deadline, Joshua Morse, one other lawyer representing Nikola, mentioned Thursday. Depending on how that course of goes, there could possibly be an public sale held round March 31. A listening to on any potential sale would doubtless occur within the second week of April, with the transaction closing shortly after.
Morse additionally mentioned through the listening to that inbound curiosity from potential consumers has solely escalated because the firm filed for chapter safety.
“It does are likely to crystallize the market,” chapter decide Thomas Horan replied.
There was minimal disagreement through the listening to, largely across the velocity of the chapter case. Nikola needs it to maneuver shortly as a result of it solely has round $47 million in money. Timothy Fox, a trial legal professional for the United States Trustee’s Office, which oversees chapter proceedings, mentioned he needs to ensure he has sufficient time to fulfill with Nikola’s collectors.
No determination was made through the listening to on timing, however Nikola discovered assist for a speedy course of from an odd social gathering: a bunch of shareholders that sued the corporate greater than 4 years in the past.
The plaintiffs in that case had been granted class motion standing simply final month, and Nikola agreed to settle the lawsuit shortly earlier than submitting for chapter. Those plaintiffs have the fourth-largest creditor declare in Nikola’s chapter due to that settlement, totaling round $13 million.
Joe Barsalona, a lawyer representing the category motion plaintiffs, mentioned Thursday that, given Nikola’s dwindling money steadiness, “it’s crucial to our shopper that this case transfer quickly.”
“We consider it’s a melting ice dice,” Barsalona mentioned.
