FF cut 20% of employees’ salary, and is looking for new investor

At the end of this June, the US new energy auto company Faraday Future (referred to as FF) received a large amount of financial support from Evergrande Group, China's second-largest property developer by sales. Not long ago, Evergrande once again became the second-largest shareholder of Guanghui, and then, it was further rumored that this action is to “pave ways for FF’s development”. Recently, IIA learned from FF: As the company is in financial difficulties, FF has announced that all employees will receive a 20% pay cut. Jia Yueting, FF founder and CEO will only receive $1 annual salary. It is reported that related product R&D and key projects are still continuing, and FF is looking for new investors.

FF said that Evergrande Health did not make periodic payment to FF in accordance with the agreement, which led to its internal financial difficulties. Therefore, the annual salary for all employees has been cut by 20% since this week. At the same time, within the scope of the law, hourly wages will also be reduced by 20%. It is reported that FF is in contact with new investors and promises to restore employee salaries to the normal standard immediately after the funds are in place.

On October 7, Evergrande Health announced that FF took its advantages of occupying a majority in the board of directors to manipulate the joint venture Smart King, and asked Evergrande to make payment without meeting payment requirements. FF used this as an excuse to arbitrate to the Hong Kong International Arbitration Centre in order to deprive the right of Evergrande of its financing consent as a shareholder and ultimately to abolish all agreements between the two.

According to the FF's news, Evergrande has not yet fulfilled its promise to pay any additional funds to FF, except for the first investment of USD800 million. Instead, it tried to gain control and ownership of all IPs of FF China and FF. According to the agreement, Evergrande Health must fulfill its USD500 million commitment in 2019 in advance at the second half of 2018 and pay the remaining USD200 million in early 2019 to meet the requirements for the mass production and delivery of FF 91.

It is reported that the arbitration results will be announced on October 25. In addition, FF acknowledged the relevant equity of Evergrande's USD800 million investment, but will not accept remaining USD1.2 billion investment. FF also hopes that Evergrande can return the corresponding equity to find new investors.