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Struggling Faraday Future Pushes Ahead with IPO Plan
Electric-car startup Faraday Future Inc. says it aims to launch an initial public offering in 2020 in spite of escalating strife with its largest investor.
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Electric-car startup Faraday Future Inc. says it aims to launch an initial public offering in 2020 in spite of escalating strife with its largest investor.
The company has reduced its workforce and implemented 20% pay cuts. CEO Jia Yueting, the former head of Chinese tech giant LeEco, told Faraday’s employees this week he will pledge his stake in the EV startup as a guarantee to its suppliers, Bloomberg News reports.
Faraday is pursuing new investors as it continues to battle its largest backer, China’s Evergrande Health Industry Group Ltd. The company had hoped to launch its first model, the 1,050-hp FF 92 crossover vehicle, as early as next month.
Evergrande agreed in July to invest $2 billion in Faraday, starting with a $800 million payment. Jia says further payments have been withheld, even though the carmaker met performance goals. He also claims that Evergrande had been trying to steal Faraday’s intellectual property, while barring it from adding new investors.
Faraday has since won a judgment that allows it to find new backers. But now the company says it is escalating its fight against Evergrande with a new lawsuit. In the meantime, it has hired Stifel, Nicolaus & Co. to help it find $500 million in new capital.
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