By on January 2, 2019

ff91

Faraday Future, the Chino-American EV developer that’s always in dutch, said Monday it has established and signed a new restructuring agreement with its main investor, Evergrande Health Industry Group Ltd. The deal concludes a rather ugly legal dispute between the two — one which placed Faraday’s intellectual property and finances in serious jeopardy.

Following the departure of co-founder Nick Sampson in November, the automaker found itself seeking new financing opportunities. Evergrande, which purchased a majority take in the EV firm via its summer acquisition of Season Smart, attempted to block new investments while Faraday accused the company of attempting a forcible takeover of the automaker by withholding funds earmarked for outstanding debts. Those funds were essential in helping it reach agreed-upon production targets. 

Evergrande had agreed to take a 45-percent stake in the company for $2 billion in funding starting with “initial payments totaling $800 [million]” through early 2018, with the remaining $1.2 billion being issued over time. But those additional payments never came.

The new agreement effectively nullifies their earlier contract. Faraday notified the world on Monday:

“Today, FF (Faraday Future Inc.) and its investor Season Smart have announced that they have entered into a newly agreed upon restructuring agreement. Both parties agreed to terminate the previous investment contract, withdraw and waive all current litigation and arbitration proceedings, and release all security including the asset preservation pledge and equity financing rights.”

While this officially ends the dispute, it doesn’t guarantee the automaker another dime — and we know it needs every penny it can find to get its factory up and running. Whether you blame Faraday’s repeated mismanagement of funds or Evergrande’s withholding of promised capital, the carmaker endured mass layoffs just months before it was scheduled to commence mass assembly of its first model, the FF91.

Faraday Future claims it will be able to solve its cash problem “quickly” now that a new deal is in place, though this statement contains a familiar ring. In truth, this is another setback in a seemingly endless chain of disappointments. The company needs fresh funding, and fast, if it intends to build vehicles at its leased Californian factory. But there are other problems to contend with.

In addition to Sampson, FF has lost several essential members of its engineering team who will need to be replaced. In fact, there’s been a mass exodus of upper-level employees over the last twelve months, resulting in a shallower talent pool than we would be comfortable with.

Still, we should tempter our general negativity with a tiny nugget of hope. While Faraday has one of the worst track records of any automotive startup in recent memory, it continues to linger despite the deck always being stacked against it. We’re not presuming anything that would resemble a comeback, but we’d be shocked if FF fades into the history books at this juncture.

[Image: Faraday Future]

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