Nikola files for Chapter 11 bankruptcy protection

Heavy-duty truck maker Nikola Corporation announced that the company and certain of its subsidiaries have filed voluntary petitions for Chapter 11 bankruptcy protection in the U.S. Nikola said it has also filed a motion seeking authorization to pursue an auction and sale process under Section 363 of the U.S. Bankruptcy Code. Nikola intends to market and sell all, substantially all or a portion of its assets and effectuate an orderly wind-down of its businesses.

Nikola Corporation headquarters in Phoenix, Ariz. (Photo: PRNewsfoto/Nikola Corporation)

Steve Girsky, president and CEO of Nikola, noted the steps the company took to advance zero-emission transportation via fuel cell electric and battery electric (BE) trucks in the face of market challenges.

“In recent months, we have taken numerous actions to raise capital, reduce our liabilities, clean up our balance sheet and preserve cash to sustain our operations,” he said. “Unfortunately, our very best efforts have not been enough to overcome these significant challenges, and the board has determined that Chapter 11 represents the best possible path forward under the circumstances for the company and its stakeholders.”

Nikola said it filed several customary “first day” motions with the United States Bankruptcy Court for the District of Delaware to ensure its limited operations could continue during the sale process. These include authorization to meet its obligations to employees.

If the Court approves, Nikola said it intends to continue certain limited directly provided (non-dealer) service and support operations for trucks currently in the field, including certain Hyla fueling operations through the end of March 2025. Thereafter, Nikola will need one or more partners to support such activities.

Nikola said it has approximately $47 million in cash on hand to fund the aforementioned activities, implement the post-petition sale process and exit Chapter 11 through a plan process. The company said it intends to request authority from the Court to complete a sale of its assets on a timeline that balances its liquidity needs with its prepetition marketing efforts to best position Nikola to maximize value for its stakeholders.