Faraday Future's fight against investor Evergrande not going well, report says
The struggling EV company lost an appeal to its arbitrator to loosen Evergrande's hold on its intellectual property.
It would be fair to say that Faraday Future is not a thriving company, and just when it didn't seem like things could get worse for the beleaguered EV startup, a Chinese arbitrator has ruled against allowing FF to more easily seek outside funding, according to The Verge.
If you're a little lost after that, we'll catch you up. Earlier this year, Faraday Future worked out a deal for funding with a Chinese company called Evergrande that essentially sold FF's intellectual property rights in exchange for $2 billion. Part of this deal stated that Evergrande would make a $700 million payment ahead of its principal investment, which it missed. Faraday CEO Jia Yueting then sought to block Evergrande's rights as a stakeholder for having missed the payment, which landed the companies in arbitration.
The Verge's report states that the Hong Kong arbitrator decided to rule against a motion by Faraday future that would have loosened the hold that Evergrande has on Faraday's IP, making it much easier to source further outside funding. But, with this ruling, Faraday is running out of luck and cash, having allegedly just issued the last round of paychecks that it can afford on Friday.
For its part, Faraday Future is doing the whole Monty Python Black Knight thing and saying that the arbitrator's ruling isn't final, and that what could be a deathblow is just a flesh wound, according to a report by the website Technode.
In addition to Faraday Future's denied motion, the company filed a separate request to seek up to a further $500 million in additional funding. The arbitrator approved this motion, but given the state of things at Faraday, we're guessing its phone isn't exactly blowing up with offers.
The company held a meeting on Thursday to discuss its options going forward, and while the details of that meeting haven't been released.
Faraday Future didn't immediately respond to a request for comment.
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