Faraday Future Founder Files for Bankruptcy, Plans to Return to China to Promote Company Development
EV-maker Faraday Future (FF) announced on October 14 that in order to completely solve the problem of personal debt, the founder and CPUO of the company, Jia Yueting, applied for personal bankruptcy restructuring (Chapter 11) in the United States on October 13 and established a creditor trust. Upon completion of the procedure, Mr. Jia Yueting will transfer all of his equity interest in Faraday Future Global Holdings to the Creditor Trust Fund to better protect the interests of creditors and repay the remaining debt.
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Jia Yueting’s debt handling team said that more than 90% of his debt is guaranteed by the company, thus it has directly caused FF a lot of operational trouble. As of now, the company’s debt repayments exceed $3 billion, with the total debt to be repaid totaling $3.6 billion. Excluding Jia Yueting’s personal debt that has been frozen, and the convertible bonds, the net debt stands at approximately $2 billion.
The announcement also indicates that after the completion of the personal bankruptcy reorganization, Jia Yueting transferred all the FF shares and related income rights that he held individually to the creditors. Furthermore, personal guarantee obligations were released in order for him to be able to return to China to work on the FF Sino-US strategy. New VC funding and a possible IPO are all deemed exceedingly significant by FF, especially for sustaining and developing their China business.