US-based electric car company Faraday Future had a rough start after its inception due to a scuffle with its key investor Evergrande Health, that lead the cash-strapped startup to lay-off, furlough and cut wages as well.
In October last year, the company’s co-founder Nick Sampson stepped down from his post calling the company “effectively insolvent in both its financial and personnel assets.” However, just when we thought the days were numbered for Faraday Future, the company announced that it had reached a new agreement with Evergrande subsidiary Season Smart, ending the disagreement and providing enough funding for the company to attempt to rebuild.
Back in 2017, Evergrande made an investment in Faraday Future to the tune of $2 billion
According to an official release that was tweeted by the company on Monday, the restructuring agreement replaces the previous contract, and both parties are dropping its litigation against each other. Faraday Future spokesman John Schilling told The Verge that Evergrande was willing to provide the company with a ‘bridge loan’ to overcome its financial difficulties.
Back in 2017, Evergrande made an investment in Faraday Future to the tune of $2 billion. Since then, the company has spent close to $800 million that the former had paid up front. The American startup then asked for another $700 million to which Evergrande agreed on the condition that CEO and founder Jia Yueting should take a step back from the company. After his resignation, Evergrande wasn’t satisfied and decided to withhold the $700 million.
Currently, with the scuffle put to rest, Faraday will be looking at plenty of tasks, particularly in rebuilding its workforce.
Currently, with the scuffle put to rest, Faraday will be looking at plenty of tasks, particularly in rebuilding its workforce. In an official 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 fulfil its commitment to product delivery.”