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
Source:
https://scmp.com/business/china-business/article/2170350/evergrande-health-jumps-10-cent-after-arbitration-calls China Business
Evergrande Health jumps 10 per cent after arbitration calls for truce in war with electric car maker Faraday Future
- Faraday Future said its largest shareholder Evergrande Health could no longer prevent it from seeking alternative funding
- Evergrande said financing options come with ‘stringent conditions’
Faraday Future said its largest shareholder Evergrande Health could no longer prevent it from seeking alternative funding
Evergrande said financing options come with ‘stringent conditions’
Shares of Evergrande Health, the largest shareholder of Chinese electric carmaker Faraday Future, surged Friday in Hong Kong after an arbitration decision pointed to the first sign of a resolution of its month-long dispute with the struggling company.
The Hong Kong-listed unit of property developer giant China Evergrande was up 10.9 per cent up at HK$11 early afternoon trade, having earlier surged as much as 15 per cent in morning trade.
The Hong Kong International Arbitration Centre has released its decision to the two companies involved in the arbitration, which remains confidential to the public, it told the Post.
Separate announcements published by both companies on Thursday imply that California-based Faraday Future has been allowed to seek fresh financing sources, although they differ on the conditions attached.
This is the latest twist of a dispute that has embroiled both companies in public back-and-forth talks and confrontations since the beginning of October, adding to the drama in Faraday Future’s efforts to rival electric carmaker Tesla.
Evergrande Health said in a statement posted on the Hong Kong’s stock exchange that the arbitrator had rejected Faraday’s application to revoke its consent right in deciding its financing, but allowed the electronic vehicle start-up to seek financing under “stringent conditions”.
New equity financing is capped at US$500 million, and Evergrande continues to enjoy pre-emptive rights to purchase the equity, according to the statement. Valuation of new shares also needs to be equal or higher than that the level at which Evergrande invested in June.
But Faraday Future interpreted the arbitration decision differently, saying it “obtained a decisive victory” on its application for emergency relief against Evergrande Health, in a statement posted to the company’s verified Twitter account on Thursday.
“The arbitrator concluded, among other things, that Evergrande can no longer prevent Faraday Future from seeking funding through other channels,” the company said.
“Faraday Future is, and will continue, to seek funding from investors around the world who share our vision.”
Earlier in October Faraday announced it had started laying off staff and cut salaries by 20 per cent in a restructuring designed to help it stay afloat.
Company founder Jia Yueting also reduced his annual salary to US$1.
The two companies joined hands in June when Evergrande, led by Chinese tycoon Hui Ka Yan, agreed to pay HK$6.7 billion (US$854.5 million) for a 45 per cent stake in Faraday, to help bail out the struggling business. Faraday Future’s operations in Nevada were suspended in 2017 after years of reckless expansion that weighed on Jia’s finances.
But the relationship turned sour quickly. In early October Jia alleged Evergrande failed to provide an agreed US$700 million of funds.
Jia sought arbitration to terminate Evergrande’s stake purchase as it was preventing him from seeking funds from other sources.
Evergrande, on the other hand, said it had already fulfilled its obligations and that Jia had manipulated his majority board position.