(Yicai Global) Jan. 29 -- Faraday Future, a debt-ridden electric vehicle startup founded by Chinese entrepreneur Jia Yueting, confirmed a media report that it will go public in the United States via a merger with a blank check company in a deal that will value the combined entity at USD3.4 billion.

Faraday Future will merge with Property Solutions Acquisition and raise about USD1 billion to support the production of its first vehicle, the FF91, Chief Executive Carsten Breitfeld said during a teleconference yesterday.

Bloomberg News reported on Jan. 10 that the Los Angeles-based carmaker was in merger talks with PSA for a valuation of about USD3 billion, according to people with knowledge of the matter.

PSA is a so-called special purpose acquisition company, a fairly new vehicle for backdoor listings in which a number of parties jointly set up a firm that raises funds in an initial pubic offering and then uses the proceeds to buy other businesses or assets later on.

Jia formed Faraday in 2014 and unveiled the FF91 the same year. But production has been postponed several times because of personnel changes and financing issues.

Once the merger is done, Faraday Future will debut the FF91 in China and the US in about 12 months, it told Yicai Global. Mass production requires funds of between USD800 million and USD850 million, according to an earlier plan.

PSA’s shares [NASDAQ: PSAC] surged almost 19 percent to USD18.57 each yesterday. After the merger, Faraday Future’s new stock ticker will be [NASDAQ: FFIE]. The transaction is expected to be completed by June.

Automaker, Government Backing

More than 30 long-term institutional investors from the US, Europe, and China will participate in the deal that should bring Faraday USD1 billion in gross proceeds, the firm said yesterday. The backers include China’s “top three private carmakers” and a first-tier Chinese city.

Faraday, automaker Geely Holding Group, and the city are expected to establish a joint venture to support the startup’s business in China, the cash-hungry firm said yesterday. Production in the Asian country should kick off in 2025 with an annual capacity from 100,000 to 250,000 units, it added.

The government of Zhuhai in Guangdong province will invest CNY2 billion (USD310 million) in Faraday to help it set up a production base in the city, Sina News reported on Jan. 27, citing people familiar with the matter.

Geely, the parent of car giant Geely Auto Group, has inked a framework agreement to join hands with Faraday on technology and engineering, the Hangzhou-based firm said in a statement today, confirming that it has joined the startup’s group of investors. The pair is in talks about forming a joint venture with iPhone assembler Hon Hai Precision Industry, it added.

“Geely will invest USD30 million to USD40 million in Faraday,” 36Kr reported earlier this week, citing insiders. Faraday wants Geely to provide contract manufacturing services, Reuters reported on Jan. 25, citing three sources familiar with the matter.

Editor: Xu Wei, Emmi Laine