Faraday Future has managed to stave off what seemed like imminent death by ending a dispute with key investor Evergrande Health Industry Group, the same company Faraday Future accused last October of trying to gain its intellectual property.
The two firms said Monday that they have agreed to terminate all previous investment contracts, withdraw and waive all current litigation and arbitration proceedings, and remove all roadblocks to Faraday Future raising further funds.
Evergrande agreed last June to purchase a 45-percent stake in Faraday Future by acquiring Season Smart, an existing shareholder of the electric car startup. As part of the deal, Evergrande was to pay approximately $2 billion to Faraday Future via a payment plan running until 2020, with $700 million of the $2 billion figure to be paid up front.
However, Evergrande never ended up paying Faraday Future, which led to the firms clashing in a Hong Kong arbitration center. Evergrande argued that Faraday Future failed to meet certain milestones its funding depended on.
Under the new agreement, Evergrande will own a 32-percent stake, down from the previous 45-percent figure, according to filings.
Faraday Future also said Monday that the new agreement would speed up its equity and debt financing efforts, adding that investors have expressed interest and several have already held talks. It also said it has completed development of its first model, the FF91 crossover SUV, and that multiple pre-production examples had been built at its plant in Hanford, California.
Faraday Future didn't provide an updated timeline for the start of deliveries of the FF91. It said last August that the first customer deliveries are scheduled to commence in the first half of 2019, however since then the electric car startup lost a co-founder and announced significant layoffs.