EV startup Faraday Future Intelligent Electric announced Monday a definitive agreement for a new financing facility with total potential funding of $600 million in a convertible secured notes structure.
The EV startup will receive an initial $52 million of committed funds and said it “continues to have active discussions with multiple capital providers for potential significant additional near-term funding”.
The CEO Carsten Breitfeld said that he is confident in delivering the first units in “late Q3 or Q4”, Subject to successful completion of this fundraising process, I am confident that we can deliver cars to our customers in late Q3 or Q4”.
Funds managed by ATW Partners, a U.S.-based institutional investor, led the transaction. Investors contributing $27 million (plus up to $31 million from additional investors who commit on or prior to August 17, 2022 and fund on or prior to August 19, 2022) will receive a conversion price of $2.2865 per FFIE share, later contributions will receive a conversion price of $2.69 per FFIE share.
All investors will receive 33% warrant coverage with an exercise price of $5.00 per FFIE share. The facility is structured to allow for additional investor participation on similar terms. Other terms can be found in our 8-K filing dated August 15, 2022.
Citi served as placement agent, and Sidley Austin LLP served as legal advisor to the Company. Blank Rome LLP and Ellenoff Grossman & Schole LLP served as legal advisors to the lead investor in the fundraising.
“I am very pleased to have this important new committed capital and framework in place for substantial additional funding. We are working diligently to complete this capital raise process in order to raise sufficient new funds to launch the FF 91. Subject to successful completion of this fundraising process, I am confident that we can deliver cars to our customers in late Q3 or Q4.” said Dr. Carsten Breitfeld, Global CEO of Faraday Future.
Dr. Breitfeld continued, “Our Hanford manufacturing facility, recently renamed the “FF ieFactory California” is nearing completion. We have all the equipment on site needed to begin production and are in the final stages of installation. The FF ieFactory California has already produced over a dozen production-intent vehicles. Testing and validation of the FF 91 is well underway, and I am very pleased with the results we are seeing. The FF 91 will be the world’s first ultra-luxury EV and will reset customer expectations for what the future of intelligent mobility can be.”
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Earlier this month, the company’s major shareholder FF Top Holding executed “a non-binding term sheet for a proposed convertible term loan facility” to raise up to $600 million. Last week, the company filed a 8-K form saying it will delay the start of production and the first deliveries of the FF91, the first model for the California-based company.
The mass production was scheduled to start this month and is now delayed to the third quarter or the fourth quarter of the year depending on when the company can secure additional funds.
FF Top unveiled that has received non-binding indications of interest from two financial investors that may invest via the Potential Lead Investor and is in discussions with the Potential Other Investors warnings that is nothing confirmed so far.
The EV startup — that in March had only 401 preorders for its first model — has been struggling with internal issues namely the removal of Brian Krolicki from the Board of Directors.
Recently, FF Top Holding delivered a notice of removal of the Top Designee Brian Krolicki from the Board of Directors. Krolicki was the 33rd Lieutenant Governor of Nevada (from 2007 to 2015) and a Board member of Faraday Future since April 2020.
FF Top said recently it has attempted to address the Board of Directors of the EV maker for the “concerns regarding the performance and direction of FFIE under the Board’s leadership” and “hopes that FFIE will constructively engage with FF Top and FFIE’s other shareholders to address these concerns”.