Property developer China Evergrande Group agreed to restructure its pledged US$2 billion investment in Los Angeles-based electric car startup Faraday Future for a 32% stake in the company without any additional investment, the South China Morning Post reported.
Under a restructuring agreement entered into Dec. 31, 2018, the parties also agreed to withdraw and waive all current litigations and arbitration proceedings against each other, ending a months-long conflict over funding issues.
Following the restructuring, Faraday's China operations will be 100% owned by Evergrande.
Faraday founder and global CEO Jia Yueting also has the option of repurchasing the shares owned by Evergrande within five years. Evergrande also agreed to release its control over Faraday assets used as collateral for part of its investment. The carmaker will be able to use the assets as collateral for debt financing.
Evergrande had earlier agreed to commit US$2 billion to Faraday over three years for a 45% stake, but the companies have recently been involved in various disputes.
In June, China Evergrande, through its Evergrande Health Industry Group Ltd. unit, agreed to acquire Season Smart Ltd., which controls the electric car startup, with plans to invest a total of HK$6.75 billion.
In October, Faraday accused Evergrande, among other things, of withholding financing and preventing the startup from receiving alternative financing or investments, in attempts "to gain control and ownership."
According to the Jan. 1 SCMP report, Evergrande has so far invested US$800 million in Faraday.