Faraday Future, a California-based electric-vehicle startup founded by fugitive Chinese tech entrepreneur Jia Yueting, is seeking to go public on the Nasdaq stock exchange and raise around $1 billion by merging with a special purpose acquisition corporation (SPAC).
The troubled EV startup said Thursday that it is merging with SPAC Property Solutions and expects to close the deal in the second quarter. About $230 million will come from cash held by Property Solutions, and Faraday will raise $775 million from cornerstone investors.
Faraday didn't disclose the names of the cornerstone investors but said they include a "top-three" private carmaker in China and long-term institutional investors.
According to a roadshow presentation obtained by Caixin, the Chinese carmaker is Zhejiang Geely Holding Group, the Chinese owner of Volvo. Faraday is in negotiations with Geely as a contract manufacturer in an attempt to start mass-producing its first model as quickly as possible.
Faraday also disclosed that the cornerstone investors include the government of a "first-tier" Chinese city. The company said the city will provide land and $175 million for a joint venture set up by Faraday. The city is believed to be Zhuhai, in Guangdong Province. Chinese state-owned companies Zhuhai Gree Group and Zhuhai Huafa Group are considering investing in the SPAC deal, according to local news reports.
FF Automobile Zhuhai, wholly owned by FF Hong Kong Holding, was set up in December in Zhuhai with registered capital of $250 million, corporate registration records show. FF Hong Kong also owns 95% of FF China, Faraday's Beijing-based unit registered in 2017. Jia's nephew Wang Jiawei is listed as a director of the new company.
A person familiar with the project told Caixin that Faraday will keep its marketing, research and development in Zhuhai and place contract manufacturing somewhere else, a person familiar with the project told Caixin.
Since its founding in 2014, Faraday has been unable to raise enough money to mass-produce the FF91, its first electric model. The company previously said it would start mass production of the FF91 about nine months after closing a new round of funding.
In October, Faraday secured a bridge loan of $45 million to support volume production of the FF91 and development of the FF81, a move that came two weeks after Reuters reported that the carmaker was mulling a backdoor listing using a SPAC. The company said it has obtained more than 14,000 orders for the FF91.
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Caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Nikkei recently agreed with the company to exchange articles in English.