Updated: Faraday Future granted emergency relief, cuts ties with Evergrande
Faraday Future and Evergrande were embroiled in a nasty row over the past few weeks. The EV maker took to Twitter today to announce that it has finally obtained an emergency relief from the Hong Kong International Arbitration Centre against its primary investor Evergrande Health Industry Group. This means that Evergrande can no longer prevent FF from seeking funding through other channels.
Update: An employee said FF will continue to apply for arbitration to strip Evergrande’s consent rights as a shareholder in respect of financing and terminate all cooperation agreements—the process would take another 6-18 months.
Today FF achieved a decisive victory on our emergency relief application. FF is, and will continue, to seek funding from investors around the world who share our vision. pic.twitter.com/rSYpGMcBYN
— Faraday Future (@FaradayFuture) October 25, 2018
In the statement, FF said Evergrande’s breach of funding obligations has pushed the company into a ‘cash crunch’. The company also accused Evergrande of making attempts to gain control of ownership over FF and its IP.
“As the largest shareholder of FF, Evergrande has intervened on the Company’s capital planning, as well as, preventing FF from utilizing its assets.”
Evergrande also “made short-term financial relief impossible by preventing the Company from obtaining other external investments,” FF said it was forced to cut employee salaries and slash jobs due to the lack of funding. The company announced earlier this week that it plans to cut 20% of salary for all staff and an unspecified number of layoffs to reduce its operational cost. The company said founder and CEO YT Jia along with a number of employees from the senior management have decided to take $1 annual salary.
Earlier this month it was reported that FF is seeking arbitration to terminate a deal to sell a 45% stake to Evergrande, claiming that payment obligations from Evergrande were not fulfilled. Evergrande then accused FF of trying to scrap the deal after squandering the initial $800 million investment.
In August, FF moved its headquarters to China. The headquarters, Evergrande FF Intelligent Automotive China, planned to focus on technology R&D, as well as the production, operation, and management of FF in China.
The EV maker said it will continue to seek funding from investors. Whether or not it will able to deliver the FF 91 by 2019 still remains to be seen.