(Yicai Global) Nov. 13 -- Faraday Future, the cash-strapped electric car startup that aims to rival Tesla, is reportedly planning on going public in 2020 to raise USD500 million.
Faraday Future is advancing a new round of financing and the initial public offering will come three to four years earlier than initially planned, tech news outlet 36Kr reported yesterday, citing a senior executive from the California-based company. Its US financial services provider, Stifel Financial, is likely to help with the IPO, the executive added.
Headed by serial Chinese entrepreneur Jia Yueting, the startup has had to lay off hundreds of employees due to financial distress. The automaker ran into trouble with its white knight investor Evergrande Health Industry Group in July, as Evergrande Health did not provide more cash to burn on development of its first mass-produced model, the FF 91.
Faraday Future is valued at more than USD10 billion, far exceeding the USD4.5 billion when Evergrande invested, the senior executive said, adding that the firm's net assets exceed USD600 million, while its debt is just tens of millions of US dollars.
"The company is effectively insolvent in both its financial and personnel assets," Nick Sampson, former co-founder and vice president, told the Verge after resigning from Faraday on Oct. 30.
The company will use up all its cash reserves by the middle of next month without new investments, an insider said at Faraday's plenary meeting. The reserves will maintain the firm's approximately 600 employees till the end of this month, the insider added.
The G2-8, the FF 91's first prototype, recently completed 5,000 kilometers of road tests in Arizona related to software optimization. If Faraday Future cannot mass-produce the vehicle by year-end, Evergrande will take the company's reins from Jia.
Editor: Emmi Laine