Would-be electric car manufacturer Faraday Future has had a rough start. Most recently, a spat with investor Evergrande Health led the cash-strapped startup to lay off, furlough and cut wages for much of its workforce. FF cofounder Nick Sampson resigned in October, calling the company "effectively insolvent in both its financial and personnel assets." Just when it looked like Faraday Future was finished for good, the company announced that has reached a new agreement with Evergrande subsidiary Season Smart, ending a crippling fight and providing enough funding for the company to attempt to rebuild.
As the company stated, the restructuring agreement replaces the previous contract, and both parties are dropping litigation against one another. A report from The Verge provides more details of the agreement. Faraday Future spokesman John Schilling told the outlet that Evergrande will provide the company with a bridge loan to "overcome" its "cash flow difficulties." Evergrande's stake in FF drops from 45 percent to 32 percent, though it will have full control over its China operations.
Evergrande came to FF's rescue back in 2017 to the tune of a $2 billion investment. Since then, the company spent the $800 million Evergrande paid up front, and asked the investor for another $700 million. Evergrande agreed on the condition that CEO and founder Jia Yueting take a step back from the company. After Jia transferred controlling shares and resigned as director, Evergrande wasn't satisfied and withheld the $700 million, which led the companies to seek arbitration in Hong Kong.
Now that that's behind them, Faraday Future has a lot of work to do, particularly in terms of rebuilding its workforce. Faraday sounds optimistic about its future, though. In a statement, the company said, "Upon signing these terms, FF's equity financing and debt financing efforts will now be able to progress quickly," citing interest from "investors all over the world" and the lifting of liens on its assets. The company says it is also "working to fully address the funding issues and fulfill its commitment of product delivery."
Prior to the mess with Evergrande company's FF91 electric car appeared to be making progress in its development. In 2017, the FF91 raced up Pikes Peak in well under 12 minutes. Back in July of 2018, we saw the car undergoing high-speed field tests, and the company showed off the first pre-production FF91 in August.
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Today, FF (Faraday Future Inc.) and its investor Season Smart(Evergrande Health wholly-owned subsidiary) have announced that they have entered into a newly agreed upon restructuring agreement. pic.twitter.com/vd4VDNyDjj
— Faraday Future (@FaradayFuture) December 31, 2018
As the company stated, the restructuring agreement replaces the previous contract, and both parties are dropping litigation against one another. A report from The Verge provides more details of the agreement. Faraday Future spokesman John Schilling told the outlet that Evergrande will provide the company with a bridge loan to "overcome" its "cash flow difficulties." Evergrande's stake in FF drops from 45 percent to 32 percent, though it will have full control over its China operations.
Evergrande came to FF's rescue back in 2017 to the tune of a $2 billion investment. Since then, the company spent the $800 million Evergrande paid up front, and asked the investor for another $700 million. Evergrande agreed on the condition that CEO and founder Jia Yueting take a step back from the company. After Jia transferred controlling shares and resigned as director, Evergrande wasn't satisfied and withheld the $700 million, which led the companies to seek arbitration in Hong Kong.
Now that that's behind them, Faraday Future has a lot of work to do, particularly in terms of rebuilding its workforce. Faraday sounds optimistic about its future, though. In a statement, the company said, "Upon signing these terms, FF's equity financing and debt financing efforts will now be able to progress quickly," citing interest from "investors all over the world" and the lifting of liens on its assets. The company says it is also "working to fully address the funding issues and fulfill its commitment of product delivery."
Prior to the mess with Evergrande company's FF91 electric car appeared to be making progress in its development. In 2017, the FF91 raced up Pikes Peak in well under 12 minutes. Back in July of 2018, we saw the car undergoing high-speed field tests, and the company showed off the first pre-production FF91 in August.
Related Video:
Featured GalleryFaraday Future FF 91
