Evergrande Group Invested $860 Million in Start-up Faraday Future, Now Largest Shareholder
Evergrande Group, a Shenzhen-based Chinese real estate giant, has acquired 100 percent shares of Season Smart Limited for HKD 6.746 billion($860 million), becoming the British company’s largest shareholder.
SEE ALSO: Faraday Future’s letter to staff shows FF China plant to start on schedule
The acquisition lead to Evergrande indirectly acquiring 45 percent of shares of the subsidiary Smart King Ltd as well, which means it now plays a dominant role in the new Elective Vehicle company Faraday Future, an American electric vehicle startup known as FF.
Smart King Ltd. was one of the investors in FF”s eleventh-hour investment that saved the company from the financial crisis at the end of 2017. Season Smart Limited has taken the place of Faraday Future as the assignee on the car company’s patents and trademarks in the United States.
Earlier in Nov 2017, Season Smart Limited and Faraday had set up Smart King Ltd. While Season Smart Limited invested $2 billion, taking up 45 percent of the new company share, FF’s previous shareholders obtained 33 percent of the joint venture for its technical property and business. The remaining 22 percent of equity was reserved as incentives for the company management.
According to the merger agreement, Smart King had already paid $800 million worth of investment, and will pay the remaining $1.2 billion via instalment by December 31, 2019 and December 31, 2020 respectively.
Established in May 2014, Faraday Future, the Californian-based electrical vehicle start-up, has a core R&D team in the U.S. As of June 2018, the company has about 1,400 staff worldwide, of which 1,000 are professionals in various areas such as new energy vehicles, computer algorithms and artificial intelligence(AI).
Faraday Future plans to complete its manufacturing preparation by the end of 2018. At present, the company has officially obtained the Hanford city project license for construction, and will fully carry out the commissioning of the production line equipment. The FF 91, FF’S first production vehicle and flagship model that was revealed at the January 2017 Consumer Electronics Show in Las Vegas, is expected to launch by the end of this year.
At the same time, Faraday Future has established R&D centers in both Beijing and Shanghai. Additionally, large-scale integrated R&D and production bases in Guangzhou and other places have been built too, landing the world’s most advanced new energy automotive technologies in China. In the letter to staff released by FF in May 13, FF revealed its plans on expansion in China with Guangzhou housing their headquarters.
Through this acquisition, Evergrande Group would further extend its business scale into the fast-growing new energy automotive industry and seize the market share to take advantage of the leading technology and products developed by FF.
Xia Haijun, Deputy Chairman on the Board of Directors of Evergrande Group, will be appointed as Chairman of Smart King Ltd. After the acquisition, Evergrande Group would become the largest shareholder holding 45% worth of shares. The previous shareholder of FF will have 33% and the management committee would take up 22%.