Electric truck maker Nikola nears bankruptcy filing
The Phoenix, Arizona-based truck maker has been struggling to raise funds amid a depleting cash balance. Its shares have lost over 99% of their value since going public in 2020.
US electric truck maker Nikola is close to filing for a bankruptcy, according to the Wall Street Journal.
Nikola is reportedly working with the law firm Pillsbury Winthrop Shaw Pittman to explore options, which include sale or restructuring of the company.
The Phoenix, Arizona-based truck maker has been struggling to raise funds amid a depleting cash balance. Its shares have lost over 99% of their value since going public in 2020.
Nikola is believed to be considering selling parts of its business or the entire company.
Sources told Bloomberg that Nicola was prepping for a potential Chapter 11 filing to protect itself from creditors amid a cash crunch, but the plans were not yet final and could change.
Its cash and cash equivalents crashed to USD 198.3 million at the end of September, compared with USD 464.7 million at the end of 2023, according to Reuters.
A Nikola official told Bloomberg it was “evaluating a variety of options” including “a financing as part of a financial restructuring.”
Investors were upbeat about the company’s prospects when it went public. But things quickly started unravelling after the company’s founder Trevor Milton resigned and was later convicted of defrauding investors.
Nikola’s financial woes deepened after its electric big-rig trucks were recalled in 2023 following fire safety issues.
