(Yicai Global) March 14 -- Faraday Future, the electric carmaker championed by controversial entrepreneur Jia Yueting, is selling off a 900 acre parcel of prime Las Vegas real estate for just USD40 million as it looks to raise cash to fund its global operations.
About 700 acres of the land, which is in Apex Industrial Park, has already been prepared for industrial construction, the Los Angeles-based firm said on WeChat today. The plot is in a foreign trade zone where it can import products and raw materials tax free.
Cash-strapped Faraday hopes by selling the plot it can fund integrated China-United States research and make better use of its global resources.
Chief Executive Jia has been looking to raise cash since Faraday's quarrel with white knight backer Evergrande Health Industry Group, a listed unit under real estate giant Evergrande Group that saved the company from impending bankruptcy last year.
The investor pledged to inject USD2 billion into the carmaker for a 45 percent stake in June, agreeing to pay USD800 million in 2018, USD600 million this year and USD600 million in 2020. It paid the initial tranche in May and in July agreed to pay USD700 million of the outstanding balance the same month, provided Faraday met certain operational conditions.
The two firms wound up battling each other over whether those conditions were met via a mediator in Hong Kong after Evergrande refused to pay. Faraday was desperate to get out of their agreement because of a clause which said that if they could not achieve mass production by the end of 2018, Evergrande would take over the company. The deal also prevented Faraday from seeking alternative funding.
Without the early injection from Evergrande, Faraday was looking unlikely to make the deadline, and did not. But before the year was up, the pair agreed that Evergrande would withdraw from the company and keep Faraday's factory in Nansha, Guangdong province, with the carmaker free to go on the hunt for other investors. Jia's efforts to find another investor have been unsuccessful so far.
Editor: James Boynton