Electric Trucking Startup Nikola Seeks to Sell Its Business by April

Introduction

Nikola, an electric trucking startup, is aiming to sell its remaining business as early as April, according to its lawyers. The company’s lawyers revealed this information during the first hearing of its bankruptcy case in Delaware. Nikola has already attracted at least three interested buyers, although their names have not been disclosed.

Background

The lawyers stated that the company hopes to solicit additional bids, with a likely submission deadline in late March. If Nikola fails to find a buyer willing to acquire the entire business, it will proceed to sell its assets in pieces to satisfy its liabilities, which exceed $1 billion. The company claims to have between $500 million and $1 billion in assets.

Recent Developments

The hearing took place just a day after Nikola filed for Chapter 11 bankruptcy protection, announcing that it would no longer operate as a standalone business. This marked the end of a company that has been plagued by drama, particularly after its founder, Trevor Milton, was convicted of multiple counts of securities fraud.

Previous Attempts to Sell

Nikola had been attempting to sell itself for months, as evident from early bankruptcy filings and lawyers’ statements. CEO Stephen Girsky revealed that the company worked with Goldman Sachs to solicit 22 potential acquirers in the truck manufacturing and transportation logistics spaces. Two international automotive manufacturers expressed interest, but one dropped out, and the other walked away in late 2024.

Further Efforts

After the failed attempts, Nikola worked with law firm Houlihan Lokey to gauge potential interest from 24 financial investors. However, the feedback indicated that it would require too much money to turn the company’s nascent business around. In December 2024, Nikola engaged in discussions with another international vehicle manufacturing company about a potential acquisition but ultimately failed to reach an agreement.

Current Status

Now in bankruptcy, Girsky stated that Nikola is in active discussions with at least three parties interested in buying the company outright. The company is also marketing some of its highest-value assets, such as the factory in Coolidge, Arizona, for possible sales. Chazz Coleman, a lawyer representing Nikola, expects the case and sale process to be "uneventful and smooth."

Upcoming Timeline

Nikola will continue to solicit interest until around March 27, with a potential auction scheduled for March 31. A hearing on any potential sale is likely to take place in the second week of April, with the transaction closing shortly after. Lawyer Joshua Morse noted that inbound interest from potential buyers has increased since the company filed for bankruptcy protection.

Bankruptcy Proceedings

The hearing saw minimal disagreement, primarily regarding the speed of the bankruptcy case. Nikola wants the process to move quickly due to its limited cash reserves of around $47 million. Timothy Fox, a trial attorney for the U.S. Trustee’s Office, expressed concerns about ensuring sufficient time to meet with Nikola’s creditors.

Support for a Speedy Process

Interestingly, a group of shareholders who sued the company over four years ago, and were recently granted class-action status, supports a rapid process. The plaintiffs, who have the fourth-largest creditor claim in Nikola’s bankruptcy, totaling around $13 million, believe it is essential to move quickly due to the company’s dwindling cash balance, describing it as a "melting ice cube."