Mainland China’s second-largest property developer by sales is buying a controlling stake in Jia Yueting’s Faraday Future for HK$6.75 billion ($860 million) as it takes on a commitment to invest some $2 billion in the flailing Los Angeles-based electric car startup.

Evergrande boss Xu Jiayin is extending some much-needed cash to Jia Yueting’s EV startup
Hong Kong-listed Evergrande Health Industry Group is taking control of the aspiring supercar maker by acquiring BVI-registered Season Smart, the subsidiary of China Evergrande Group announced to the stock exchange on Monday.
The announced purchase price of $860 million is more than double the $300 million investment that Evergrande was rumoured to be making in Faraday when media reports of the deal first surfaced two months ago.
Get CFIUS Approval, Then Reveal Mainland Ownership
Evergrande Health’s buyout of the BVI firm brings clarity to a transaction which the property developer has been rumoured to be involved in since Faraday received a Hong Kong financial lifeline late last year.
Chiu Tao, the chairman of Hong Kong-listed CST Group Limited, and a reported associate of Evergrande boss Xu Jiayin, represented Season Smart last November in signing an agreement to invest $2 billion in return for a 45 percent stake in Faraday Future. The BVI firm is said to have already invested $800 million in the car maker, and under the terms of the 2017 deal, will invest a further $1.2 billion in two installments of $600 million each, by the end of 2019 and 2020 respectively.
The agreement also gave Season Smart control over key Faraday patents and other intellectual property.
Evergrande’s purchase of Season Smart was announced this week, after Faraday won approval from the Committee on Foreign Investment in the United States (CFIUS) for Season Smart’s $2 billion investment in the high tech startup.
Jia Welcomes Evergrande on Board
Following the acquisition of Season Smart, Evergrande Health is now the largest shareholder in the electric vehicle maker, while Faraday Future’s original shareholders will retain a 33 percent stake. The remaining 22 percent interest will be reserved for employees. The company’s founder, Jia, will take the role of global CEO, according to a separate statement by the company on Weibo.

Jia Yueting will take the role of Faraday Future’s global CEO
The Evergrande unit previously focussed on investing in high-end hospitals, community health services and health management services. “Through acquiring world-leading new energy automotive technology and products from the acquisition, the company has the opportunity to obtain a strong competitiveness in the fast-growing new energy automotive industry, capture market share and diversify its businesses,” Evergrande Health said in the statement.
“We would like to thank all of our partners, suppliers, employees, and our new investor for their patience and continued dedication towards the company throughout this crucial growth process,” said Jia, who also founded troubled Chinese conglomerate LeEco, in a statement. “We welcome Evergrande Health as a new strategic investor. Our more than 1,000 global employees together will continue working to break boundaries of various industries and sharing the intelligent mobility ecosystem we want to create.”
Property Firm Helps out Struggling Car Maker
The investment by the hospital and healthcare firm will come in handy for Faraday Future, which has been struggling to stay afloat. Last December, Faraday Future was reported to have just enough funds to sustain its payroll through the end of the year.
In July last year, the company halted construction of its 3 million square foot manufacturing plant in Las Vegas, Nevada. The company later said that it signed a lease for a facility in California with existing infrastructure for a faster path to production.
The startup also saw the departure of multiple executives in the span of several months. BMW veteran Stefan Krause stepped down as the company’s CFO and COO last October, and the firm’s chief technology officer Ulrich Kranz also reportedly departed in November, just three months after joining.
Faraday Future later filed a lawsuit against the two former executives for luring Faraday talent to their EV startup, EVelozcity in January. The car maker’s chief designer Richard Kim and the head of human resources Crystal Peterson also left the company in November and January, respectively.
The injection into Faraday Future came as Evergrande seeks to boost its investments in high-tech businesses. In April, Evergrande Group said it would invest RMB 100 billion ($16 billion) over the next decade in developing a trio of high-tech industry bases in China for life sciences, aviation, quantum technology, artificial intelligence, robotics, modern agriculture and new energy vehicles.
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