Faraday Future is trying to cancel a $2 billion investment as it reportedly struggles to pay suppliers
- 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.