Yet Another Bailout for Faraday Future

Faraday Future, the contentious automotive startup that always seems to find (and then lose) sizable amounts of cash, has announced it has once again managed to secure new funding. According to its press release, Faraday says will receive $225 million in bridge financing via a funding round led by Birch Lake Associates.

While the bulk of the cash will go towards paying off vendors, some of which have filed lawsuits, around 40 percent will be left over to help get the FF91 to market and prove the company can actually build a car. The strategy seems risky, but it may be Faraday’s best bet at this point.

“As part of the vendor program, Birch Lake has also provided financing to FF for the company to pay all past due amounts for approximately 60 percent of FF’s vendor base, including smaller vendors who are owed less than $20,000,” the company explained. “FF’s larger suppliers and vendors have the opportunity to benefit in the vendor trust program by exchanging unsecured trade claims for trust interests that will hold a secured claim equal to all vendor claims in the trust and will include a repayment schedule to be completed during 2019.”

Faraday is valuing its intellectual property, which is easily its biggest asset, at $1.25 billion. It’s also planning a separate vehicle run in China with the V9, after The9 decided it was willing to contribute up to $600 million in a joint venture. The duo claim they’ll be able to build 300,000 cars per year. Some of that initial cash is supposed to go into the FF91, too.

“Having worked closely with the Faraday team to accomplish a complex restructuring, we are more confident than ever that FF is well positioned to embark on the next stage of its success. We are excited to establish this bridge financing facility and move quickly to raise the additional capital to help Faraday redefine mobility,” said Jim Nappo, managing director of Stifel Nicolaus & Co. — the company in charge of its its equity capital-raising program.

We’re not sure what to say. Faraday’s ability to find funding is downright miraculous, but everything always seems to go sideways in the end. While FF has made real progress on its flagship SUV, we’ve only seen prototypes and incomplete production models/testbeds thus far. The company has also lost key staff members over the last few years and its technology, while still impressive, isn’t quite as cutting edge as when the FF91 first saw the light of day.

[Image: Faraday Future]