During the first hearing of its bankruptcy case in Delaware on Thursday, attorneys for the electric trucking firm Nikola told a judge that the company hopes to sell what’s left of its whole business as early as April.
According to the attorneys, Nikola already has at least three potential purchasers (whom they did not identify), and the business intends to request additional bids, with a deadline for submissions probably in late March.
The company will turn to selling off its assets in chunks in an effort to pay off more than $1 billion in liabilities if Nikola is unable to find a buyer ready to purchase the entire company. (Nikola claims assets worth between $500 million and $1 billion.)
Nikola, a company that filed for Chapter 11 bankruptcy protection, announced it would no longer operate as a stand-alone business. The company had been trying to sell itself for months, with CEO Stephen Girsky stating that it worked with Goldman Sachs and solicited 22 potential acquirers, but received feedback that it would require too much money to turn the business around.
After four weeks of what Girsky called “substantial due diligence,” Nikola ended up in talks with another “international vehicle manufacturing company” in December 2024 regarding a possible acquisition. However, Girsky observed that the potential buyer “finally walked away,” which was a “disappointing conclusion.”
Girsky, who is now in bankruptcy, informed the court that Nikola is in “active discussions with at least three” parties who are interested in purchasing the business outright. They are also marketing some of the company’s most valuable assets, including the Coolidge, Arizona, facility, for potential sales.
Nikola, a company in bankruptcy, is seeking a sale and is seeking interest until March 27, the first bid submission deadline. The process could lead to an auction and a hearing in April. Inbound interest from potential buyers has only increased since filing for bankruptcy protection. The bankruptcy case is expected to move quickly due to Nikola’s limited cash.
The timing hearing ended without a decision, but Nikola was able to get support for a quick procedure from an unexpected source: a group of shareholders who had sued the firm over four years prior.
Just last month, the plaintiffs in that case were awarded class-action status, and Nikola consented to a settlement before declaring bankruptcy. Because of that deal, those plaintiffs now have the fourth-largest creditor claim in Nikola’s bankruptcy, with a total of almost $13 million.
The class-action plaintiffs’ attorney, Joe Barsalona, stated Thursday that “it is imperative to our client that this case move rapidly.” due to Nikola’s declining financial situation.
“We believe it is a melting ice cube,” Barsalona stated.
