HANFORD —The New Year has brought a glimmer of hope for Faraday Future, as the company comes to an agreement with its main investor.
According to technology new website The Verge, investor Evergrande announced Monday that it has agreed to restructure its $2 billion investment into the electric car startup. In return, Evergrande, a Chinese real estate group, will take full control over Faraday’s efforts in China and both sides will drop ongoing litigation against each other.
More so, The Verge also reported that Evergrande agreed to release its control over Faraday’s assets and intellectual property, which had been secured as collateral, and its 45 percent stake in the company was reduced to 32 percent. Faraday will have the option to purchase those shares within five years.
The original deal —in which Evergrande committed $2 billion in funding toward Faraday’s efforts, including initial payments totaling $800 million through early 2018 and the remaining $1.2 billion over time — is now over.
Evergrande had accused Faraday Future founder and CEO YT Jia of trying to back out of the initial deal, while Faraday officials said Evergrande failed to live up to its end of the bargain and was trying to prevent Faraday from accepting financing from other sources.
This dispute is what eventually led to arbitration in Hong Kong courts.
Faraday Future ran into several difficulties the past few months, including layoffs, salary cuts, furloughs and executive departures. It’s unclear how the restructured deal will affect the hundreds of furloughed employees, some of which are from the company’s Hanford facility.
John Schilling, a spokesperson for Faraday, told The Verge that the company will receive a bridge loan from Evergrande to help some of the cash flow difficulties.
Faraday officials released a statement Monday via Twitter, which said upon signing the new terms, its equity financing and debt financing efforts will now be able to “progress quickly.”
“In terms of equity financing, investors from all over the world have expressed interests in [Faraday Future], and several have already started discussions with [Faraday Future],” the statement said.” In terms of debt financing, [Faraday Future] is expected to have a breakthrough due to the lift of previous liens on its assets.”
Faraday Future officials said the company has been grateful for the support of its global suppliers, especially during the past few difficult months, and its remaining base of employees who they said have fought hard to continue the vision of the company.
“FF is working to fully address the funding issues and fulfill its commitment of product delivery,” the statement continued. “Together with our global supplier partners, investors, employees and customers, [Faraday Future] is excited to achieve our ultimate vision of the shared intelligent mobility ecosystem.”
In addition, officials said the company “successfully concluded its product development phase and has rolled out multiple pre-production vehicles in preparation for the successful delivery of FF 91,” its flagship luxury electronic vehicle.
They said Faraday Future will continue to focus on final product delivery and maximize the interests of its shareholders, global suppliers and future users.