Faraday will unite with PSAC (Property Solutions Acquisition Corp), while Geely will help bankroll a $775Mn funding in the form of PIPE
Geely, one of China’s leading automaker, will reportedly be an anchor investor in the merger deal between U.S. electric vehicle (EV) firm, Faraday Future and PSAC, a blank-check acquisition company. The deal, soon to be announced in the U.S., will value Faraday at about $2.7 billion.
As per reliable sources, Faraday will merge with PSAC (Property Solutions Acquisition Corp), while Geely will help bankroll a $775 million financing package in the form of PIPE (private investment in public equity).
PSAC is a special purpose acquisition company, a category of firms that raise funds in an IPO (initial public offering) with an aim of buying a private company. This concept emerged last year as a popular investment vehicle on Wall Street. While for businesses that are being acquired by such firms, the merger acts as an alternative way for them to go public over a traditional IPO.
Founded in 2014, Faraday Future was the brainchild of Jia Yueting, a Chinese businessman who was once slated to be China’s answer to Tesla’s Elon Musk. Based in Los Angeles-based, Faraday first announced its plans to build the FF 91, an all-electric vehicle.
The company had touted plans for a 2019 launch but faced a delay in production plans multiple times given to a series of financing issues.
As of now, Faraday Future aims at setting up a new base in China and opt Geely for contract manufacturing services. Prior to this, the company had already established a plant in Hanford, California. Speculations are made that other Chinese state-owned companies such as Zhuhai Huafa Group and Zhuhai Gree Group are also looking to pump in funds in the SPAC deal.