Faraday Future trying to terminate $2 billion investment

Faraday Future’s planned FF91 SUV.
Faraday Future

• The electric vehicle startup Faraday
  Future is attempting to cancel a $2 billion deal that
  would give a 45% ownership stake to the Chinese healthcare
  company Evergrande Health Industry Group,
  according to a filing on the Hong Kong stock exchange first
  reported by
  Reuters.
• The filing says that Faraday Future asked for a $700
  million advance from Evergrande and has entered into
  arbitration to cancel all of its agreements with Evergrande
  after claiming it had not received the $700 million
  payment.
• Evergrande says in the filing that Faraday had not met
  the terms necessary to receive the funding, but Faraday said in
  a statement that it had.
• Faraday has struggled to build its planned FF91
  electric SUV amid financial concerns.

 

The electric vehicle startup Faraday Future is attempting to
cancel a $2 billion deal that would give a 45% ownership stake to
the Chinese healthcare company Evergrande Health Industry Group,

according to a filing on the Hong Kong stock exchange first
reported by
Reuters.

Faraday Future’s desire to end the deal comes as it struggles to
pay vendors and suppliers after spending the first $800 million
Evergrande had planned to invest in it, according to
The Verge. Faraday did not immediately respond to a
request for comment about the report. 

The filing says that Faraday Future asked for a $700 million
advance on the remaining $1.2 billion of Evergrande’s planned
investment and has entered into arbitration to cancel all of its
agreements with Evergrande after claiming it had not received the
$700 million payment. Evergrande says in the filing that Faraday
had not met the terms necessary to receive the funding.

In a statement posted
to Twitter on Monday, Faraday said it had met the required
conditions to receive the advance payment and is attempting to
terminate its deal with Evergrande as a result of Evergrande’s
failure to provide the promised funding. Faraday also denied the
claim in Evergrande’s filing that Faraday founder and CEO Jia
Yueting manipulated Evergande’s board of directors to secure the
agreement for the $700 advance payment.

The automaker, which was founded in 2014, has struggled to build
its planned FF91 electric SUV amid financial concerns. Faraday
has faced lawsuits and liens from suppliers who claim they have
not been paid, and the first pre-production version of the FF91
caught fire hours after it was shown to employees and their
families, according to The Verge.

Yueting, who is also the founder and chairman of the Chinese tech
company LeEco, had
$182 million in assets frozen by the Chinese government in
2017 due to unfulfilled loan payments.