It is well known that Jia Yueting always has a dream of making a car, so he can not hesitate to leave LeTV and Cool, and concentrate on his own Faraday. However, this process has not been so smooth, and it can even be said to be worse. According to relevant sources, Faraday FF ​​may not be able to complete 500 million US dollars of financing.
According to foreign media reports, Jia Yueting, who once claimed to surpass Tesla, faces a new obstacle. According to informed sources, his American electric car startup may not be able to complete the latest round of financing of 500 million US dollars.
According to people familiar with the matter, if Faraday Future can't complete the A round of financing by December, then a convertible bond with more than 400 million US dollars and a 12% interest rate will be paid immediately. The electric car manufacturer also has to deal with about $100 million in unpaid accounts.
People familiar with the matter said the company needed to raise funds to pay back Chinese investors who financed the debt, but after months of searching, the company has been unable to raise funds.
This year, Jia Yueting gave up control of LeTV, which is often referred to as "China's Netflix." Jia Yueting focused his attention on Faraday Future, whose goal is to combine Chinese cash with Western technology to challenge Elon Musk's Tesla Motors.
According to one person familiar with the matter, one of the problems faced by the electric car startup in financing is that it cannot allow mainland regulators to approve the transfer of funds abroad.
The company said in the statement: "We acknowledge that we are in the process of A round of financing, and there is nothing to tell."
Faraday was shocked by the launch of a 1,000-horsepower prototype of the Batmobile, which was unveiled at the CES show in Las Vegas two years ago. Jia Yueting plans to build a $1 billion manufacturing facility in the desert region of Nevada and create 4,500 jobs by 2017.
However, this production plant was discontinued. Jia Yueting admitted that LeTV faced a shortage of funds due to its rapid development and too many product subdivisions. In addition to the video streaming business, LeTV Internet Information Technology also develops products such as smartphones, movies and TVs.
Now, Faraday Future needs more money to produce real cars, not just prototypes. At the time, some sources said that the company was seeking to raise $1 billion.
People familiar with the matter said that if the $500 million financing is successful, those debts will be converted into stocks.
In January of this year, Sunac and other investors purchased shares of LeTV and its related companies worth RMB 16.8 billion, of which 10 billion were shares held by Jia Yueting. Jia Yueting later resigned as LeTV’s leadership position.
According to people familiar with the matter, Faraday Future has received at least a $30 million transitional loan. In addition, the company also defaulted on the bonuses of employees and the 2016 salary increase.
People familiar with the matter said the company hopes the company in the A round of financing will be valued between $1.5 billion and $2 billion, but the parts manufacturer and media partners asked the company to pay the outstanding amount and the court began to freeze the shares of Jia Yueting. After that, potential investors will leave.
Some media reports said that Indian automaker Tata Motors invested $900 million in Faraday for a $9 billion valuation, but Tata Motors denied the reports.
It is reported that Tefan Krause, the former chief financial officer who left in October last year, is also preparing for bankruptcy protection while seeking alternative funds. According to people familiar with the matter, Jia Yueting eventually gave up the plan and all the proposals that might lead him to lose control of the business.
According to people familiar with the matter, Indian car manufacturer Mahindra & Mahindra intends to act as a “covering horse†to open the bid for the court-supervised auction. The company declined to comment.
Faraday Future issued a statement on its official website this month that the company has terminated the contract between Klaus and former chief technology officer Ulrich Kranz. Both were born in BMW and they told the media that they had resigned in October. The two did not disclose the terms of the termination and potential legal proceedings.
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