General Motors considers boosting stake in Nikola in reworked deal

General Motors has tentatively agreed to take an 11% stake in Nikola as part of a cash-free deal made public last month.Talks to finalize the agreemen
...
The GM logo is pictured at a General Motors Assembly Plant. (File Photo) (REUTERS)
The GM logo is pictured at a General Motors Assembly Plant. (File Photo)

General Motors Co. is considering revisions to its deal with embattled Nikola Corp., according to people familiar with the discussions, and may seek a higher stake in the startup now that its valuation has fallen after allegations of deception.

GM tentatively agreed to take an 11% stake in Nikola as part of a cash-free deal made public last month. The Detroit carmaker would supply hydrogen fuel-cell technology to its junior partner and manufacture a new battery-powered pickup for it called the Badger. Talks to finalize the agreement are ongoing ahead of a Dec. 3 deadline.

Also check these Vehicles

Find more Cars
Force Motors Gurkha (HT Auto photo)
Engine Icon2596.0 cc FuelType IconDiesel
₹ 13.59 Lakhs
Compare
View Offers
Mean Metal Motors Azani (HT Auto photo)
UPCOMING
BatteryCapacity Icon120 Kwh Range Icon700 km
₹ 88 - 90 Lakhs
View Details
Force Motors Gurkha 5 Door (HT Auto photo)
UPCOMING
Engine Icon2596 cc FuelType IconDiesel
₹ 16 Lakhs
View Details
Revolt Motors Rv400 (HT Auto photo)
BatteryCapacity Icon3.24 KWh Range Icon150 km
₹ 1.27 - 1.44 Lakhs
Compare
View Offers
Velev Motors Vio (HT Auto photo)
Range Icon70 km/charge
₹52,000
Compare
Tork Motors Kratos (HT Auto photo)
BatteryCapacity Icon4 kWh Range Icon180 km/charge
₹ 1.22 - 1.68 Lakhs
Compare
View Offers

Since the deal was announced on Sept. 8, Nikola stock has fallen by more than half and GM has sought better terms before closing, said the people, who asked not to be identified because the discussions are private. GM could push to raise its equity in Nikola beyond the planned 11% or seek warrants that would guarantee or even increase that level of ownership if the company raises more money.

Also Read : Nikola CEO confident of closing deal with energy partner, shares up almost 21%

GM’s due diligence on the startup has been questioned after a short seller accused Nikola of overstating its capabilities and know-how. The allegations -- and federal regulatory probes into those claims -- sent the Phoenix-based company’s stock price into a downward spiral. Nikola has denied the allegations against it and Trevor Milton, the company’s founder and former chairman.

Shares of Nikola rose as much as 2.5% in post-market trading after closing Thursday at $24.11.

GM’s potential interest in a larger stake in Nikola was reported earlier by CNBC.

Officials at Nikola have tried to put the controversy behind it following Milton’s resignation on Sept. 21 by embarking on a charm offensive showcasing its innovations and role as an integrator of technology from strategic partners such as Robert Bosch GmbH.

Also Read : Race for electric trucks is on as Nikola readies prototypes for 2021 launch

Nikola on Thursday named Steve Shindler to its board, replacing Lonnie Stalsberg. Shindler until June served as chief financial officer of VectoIQ LLC, the special purpose acquisition company that arranged for Nikola to go public through a reverse merger. VectoIQ was run by Stephen Girsky, a former GM vice chairman who helped broker the partnership between GM and Nikola and now serves as vice-chair of the startup.

The boardroom changes came one day after Nikola postponed a December event where it had planned to show the Badger pickup and other vehicles. The Badger wasn’t mentioned in a statement Wednesday outlining Nikola’s strategy and vision.

First Published Date: 02 Oct 2020, 11:17 AM IST
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.