(Yicai Global) Aug. 3 -- Shares of Faraday Future rallied after it was reported that the electric vehicle brand set up by Chinese serial entrepreneur Jia Yueting is likely to receive funding of up to USD600 million to finally kick off mass production of its first model.
Faraday Future Intelligent Electric [NASDAQ: FFIE] surged 4.6 percent in after-hours trading following a 21 percent uptick to USD2.42 yesterday. The shares are still more than 60 percent down this year.
Two investors who are not affiliates of FF's major shareholder FF Top Holding are interested in taking part in the two-tranche financing, and the firm is in talks with more potential participants, The Paper reported yesterday, citing a press release published by FF Top.
The California-based startup has postponed production of its car model due to supply chain issues and the necessity to raise more cash, the Wall Street Journal reported last week.
The investors might be spending up to USD300 million to buy senior secured convertible notes, according to a non-binding term sheet. FF Top anticipates providing reasonable downside protection to the potential lead investor by pledging a portion of its common stock, The Paper report added.
The carmaker is talking with a potential investor as it needs USD325 million to produce its FF91 electric sport utility vehicle in the United States and to fund its operations this year, according to the WSJ report. Mass production is supposed to start in the third or fourth quarter after delays.
FF's operations have been questioned. In October, J Capital Research shorted FF, claiming the firm is not likely to sell a single car. In November, the automobile company received a delisting warning from the Nasdaq after failing to submit its third-quarter earnings results on time.
Editor: Emmi Laine, Xiao Yi