Faraday Future, once regarded as potential Tesla rival, has been in talks to go public through a merger with Nasdaq-listed blank-check firm Property Solutions Acquisition Corp, Bloomberg reported on Monday, citing sources.
The special purpose acquisition company (SPAC) is seeking to raise more than USD 400 million for the transaction, which would value the combined entity at around USD 3 billion, Bloomberg wrote, adding that the deals haven’t been finalized and are subject to changes. A SPAC is a shell company with no commercial operations, designed to take businesses public without going through the traditional IPO process.
Los Angeles-based Faraday Future, which was founded in 2014 by high-profile Chinese entrepreneur Jia Yueting, showcased its flagship model—a four-door, sports-utility vehicle called the FF 91—as early as in 2017 at CES. But FF 91 never achieved mass production, due to Jia’s bankruptcy, a long-lasting cash crunch, and frequent leadership shake-ups. CEO Carsten Breitfeld once said that the real business opportunity is remaking ride-hailing and car-sharing with high-tech vehicles that serve as a platform for revenue-generating software services, the Verge wrote.
Property Solutions raised USD 230 million in its IPO in July. It initially said that it planned to target firms in the real-estate industry including property technology. Other EV companies such as Nikola and Fisker, also went public by merging with blank-check firms.
Faraday Future last week announced that it will appoint a new CFO, Zvi Glasman, who formerly worked at Fox Factory Holdings. The firm also said that FF 91 will start sales approximately 12 months following a round of funding. In October, the company disclosed that it scored USD 45 million in debt financing from Birch Lake, a Chicago-based merchant bank, to support mass production of the FF 91 model and continue development of the FF 81, KrASIA wrote.
The EV sector has been heating up recently. Chinese EV maker Nio (NYSE:NIO) unveiled its new ET7 luxury sedan at its 2021 “NIO Day” over the weekend. The new model will be available early next year and equipped with upgraded features, including autonomous driving sensors, a “crystal-like heartbeat” tail light, and all-glass roof. Baidu on Monday announced that it plans to establish a company to produce intelligent electric EVs, and that it entered into a strategic partnership with auto manufacturer Zhejiang Geely Holding Group, confirming a previous report.
