The U.S. Department of Energy is auctioning off a $50 million loan it made to the now-defunct Vehicle Production Group LLC, which makes wheelchair-accessible vans that run on compressed gas. If successful, the government may have found a way to recoup loans funded by U.S. taxpayers that was thought to have been written off. So reports Reuters.
VPG closed its doors earlier this year after running out of cash. The DOE and VPG have been in talks with potential buyers for the company. The company’s former CEO, John Walsh, said in an email that VPG is “in the process of being purchased and should be back in production soon.”
Whoever buys VPG’s loan could either push for repayment or exchange it for equity in the new company, Reuters reports.
VPG was awarded $50 million under the government’s Advanced Technology Vehicles Manufacturing program, which also provided funding to Ford Motor Co., Nissan Motor Co. and Tesla Motors Inc.
The program also awarded $529 million to hybrid sports car maker Fisker Automotive. Fisker, like VPG, had trouble meeting the performance targets spelled out in its loan agreements. It currently owes the DOE $192 million.
Unlike VPG, Fisker, which has not built a car in more than a year, has not yet been able to find a buyer. Earlier this year, some investors in Fisker tried to buy the government’s loan at a discount with the intent of turning the company around. Their request led the DOE to investigate the possibility of selling such loans, Reuters reports.
Fisker declined to comment.
If the Energy Department can sell VPG’s loan successfully in an auction, the method may prove to be a way for government officials to get rid of other green-tech loans that have stopped performing. The auction was held Thursday. Energy Department officials did not respond to Reuters’ requests for comment.
In the meantime, some don’t see the value in either Fisker or VPG.
“I just don’t see a great argument for making the bid and resurrecting either of them,” said Brett Smith, an analyst with the Center for Automotive Research.
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