It definitely looks like the year 2019 is going to be a great year for Faraday Future, a company on death row last year. After much legal battles between the electric car startup and it’s main investor Evergrande. Both parties have decided to drop their swords. This is following a new agreement reached with Evergrande Health’s Season Smart that will keep the money flowing in. Faraday Future was on the verge of bankruptcy and death. This was after it’s main Chinese investor Evergrande cut off funding from the company. According to a release posted to the Hong Kong Stock Exchange, both companies have agreed to drop all litigations against each other.
This is good news for the company although this does not explain what happens to all affected workers. Many workers of the company left as a result of challenges facing the company. John Schilling, spokesperson for Faraday Future says the company will soon “overcome [the startup’s] cash flow difficulties.” The challenges facing the company last year was so intense that it resulted in massive layoffs as well as the loss of a number of key executives.
The main reason Faraday Future could not secure a loan was that Evergrande seized its assets. This made it impossible to use them as collaterals. Now Evergrande has finally agreed to release all its assets. In this new agreement, Evergrande’s 45% stake in Faraday Future will be reduced down to 32%. Also, the company will also have an option to buy out Evergrande’s shares in 5 years. This means the original deal is now dead. This new deal is great and according to a statement by the company, it says “INVESTORS FROM ALL OVER THE WORLD HAVE EXPRESSED INTEREST… AND SEVERAL HAVE ALREADY STARTED DISCUSSIONS.”
The major problem with Faraday Future is it’s founder Jia Yueting but now he’s completely out of the picture. The company looks like it might survive. At TechCapon, we will continue to monitor the situation and get keep you updated.