Fisker (NYSE: FSR) witnessed a surge in its stock value by more than 17% on Monday. This comes in response to the company’s declaration of an amendment and waiver agreement with an institutional investor who owns its 0% senior secured convertible notes, due in 2025.
On July 10, both entities agreed to a Securities Purchase Agreement, enabling the investor to buy $510 million of convertible notes, a form of debt.
The First Amendment specifies that if Fisker opts to form a partnership with the original equipment manufacturer (OEM), any intellectual property (IP) liens given to the investor will be relinquished. This amendment provides Fisker with increased flexibility in collaborating with OEMs.
The second amendment in the agreement lifts all financial covenants concerning Fisker’s cash reserves. Fisker now has the liberty to utilize this cash for its operations.
Lastly, Fisker (NYSE: FSR) obtained a waiver from the investor, absolving Fisker from any obligations related to its delayed earnings report for the quarter ending September 30.
As of January 19, the investor retained ownership of $324.50 million of the notes, a decrease from the initial $510 million. The $185.50 million difference was converted into 159.06 million shares of FSR stock.
Henrik Fisker, Fisker’s CEO and Chairman, expressed his satisfaction, stating,
“I am pleased that we were able to reach an agreement with one of our investors that will provide increased flexibility and better position us to execute on potential strategic business deals.”
These amendments are undoubtedly advantageous for the electric vehicle (EV) company, although it also indicates that more note conversions are likely forthcoming.
By the end of trading on Monday, FSR stock had appreciated by 17.27%, with 98,787,039 (98.78 million) shares changing hands. This trading volume exceeded the company’s daily average of 25.79 million shares.
