On the evening of November 7, Evergrande Health announced that Shi Ying (a wholly-owned subsidiary of Evergrande Health) had filed a comprehensive counterclaim against Jia Yueting and smart king, a joint venture company, for their performance of the contract. What's the matter with Xu Jiayin telling Jia Yueting? Let's get to know.
According to Evergrande health, Jia Yueting and the joint venture forced out the cashier appointed by Shiying and prevented Shiying's financial personnel from carrying out financial review, which made Shiying unable to know the financial situation of the joint venture. At the same time, the directors of the joint venture appointed by Shi Ying also filed a lawsuit in the Grand Court of the Cayman Islands.
Evergrande health also said that in accordance with the shareholders' agreement, Shi Ying has the right to conduct financial review and appoint a teller to the joint venture company, and agreed that if the teller does not sign for seven days, it will be deemed as agreeing to pay. At the same time, due to the refusal of the joint venture to provide financial information and related documents, the directors appointed by Shi Ying filed a lawsuit to the Cayman Islands court, requesting the court to order the joint venture to provide all financial information and related documents.
These lawsuits add another variable to the development of FF (Faraday future). Previously, FF has been allowed to obtain emergency relief funds of no more than US $500 million from the outside world, and has released a message that it has "reached a fund intention agreement with an international institution". In the eyes of the outside world, the difficult period of Jia Yueting and FF is far from over due to the unknown specific sources of funds and payment methods.
One piece of good news about FF is that FF is in contact with a number of investors from different backgrounds and has recently officially signed a contract with the US investment bank stifel. According to FF insiders, stifel has sent core staff to FF and discussed financing, project progress and supply chain relationship maintenance with FF finance, product and supply chain leaders.
The two sides have fought frequently
In the past month, there have been numerous arbitration disputes between Evergrande and FF. After the two sides split their faces, from the personnel field to the public opinion field, it can be said that they repeatedly 'fight'.
The exposure of the dispute originated from an announcement. On October 7, Evergrande Health issued a notice that Jia Yueting used his right to hold most of the directors' seats in the joint venture company to control the joint venture company, and required Evergrande to pay when the contract payment terms were not met. On October 3, 2018, he proposed an arbitration in the Hong Kong arbitration center on the pretext of this, demanding to deprive Evergrande of the consent right of financing as a shareholder and terminate all agreements.
Subsequently, FF responded to Evergrande's termination of the contract. The reason why FF wanted to terminate the contract with Evergrande was that Evergrande failed to fulfill its commitment of payment during the validity of the agreement, and tried to obtain control and ownership of all intellectual property rights of FF China and FF. At the same time, Evergrande prevented FF from accepting other financing.
On October 25, the arbitration results of the disputes between the two parties were published. Evergrande Health said that the arbitration rejected Jia Yueting's application to completely deprive Evergrande of the right to consent to financing, and Jia Yueting's new application to further deprive Evergrande of the right to mortgage its assets. FF stressed that the arbitrators ruled that Evergrande could no longer prevent FF from obtaining funds from other financing channels.
Evergrande's financing consent right to FF is the core issue of this emergency arbitration. According to Evergrande health announcement: the arbitrators also ruled that smart King (FF company entity) should be allowed to carry out financing with strict conditions, in which the valuation of new share financing should not be lower than the post investment valuation of Shiying, which enjoys the preemptive right of new shares; and the amount of external financing before the final arbitration should not exceed US $500 million.
Although Evergrande and FF both claimed their victory, the reality is that the "emergency arbitration" mentioned in the above announcement is only a temporary relief measure before the formal arbitration. "Whether to abrogate the relevant rights of Evergrande will be decided in the next 6 to 18 months. 'according to the industry.
FF has publicly accused Evergrande of preventing it from accepting direct financing from other sources, but its search for financing has not stopped. A person familiar with the matter told China entrepreneur that Jia Yueting was in contact with new financing parties, including Sequoia Capital and a Middle East Fund, but the talks were not smooth. 'FF said that since Evergrande's default led to FF's financial crisis, FF has taken emergency management measures and formulated emergency financial planning.
When the financing matters are not clear, FF has started 'throttling' internally. For example, layoffs and pay cuts. FF statement said: 'due to Evergrande's breach of contract and short-term cash flow difficulties, temporary measures will be taken. During the transitional period of about two months, the future employees who joined Faraday after May 1 this year will be suspended from salary in November and December, and the positions of the employees who joined before May 1 will be reserved to promote the mass production and delivery of ff91, but the salary needs to be temporarily reduced. '
FF new investor finalized
FF is accelerating the financing process. After the arbitration, FF has signed a contract with the US investment bank stifel, Reuters reported. According to FF insiders, stifel has sent core staff to FF and discussed financing, project progress and supply chain relationship maintenance with FF finance, product and supply chain leaders.
According to stifel's official website, stevier is a famous investment bank with a history of more than 100 years in the United States, and has provided financing consulting services for many famous enterprises. Since 2005, the bank has completed more IPO equity financing cases than Morgan Stanley and JPMorgan, becoming the best performing investment bank in the field. The company has extensive experience in debt financing.
Whether FF 91 can achieve mass production on schedule or not is still the 'sword of Damocles' hanging on Jia Yueting's head. When internal control measures such as salary reduction and layoff are implemented, it is the key to FF's self salvation to find a suitable new investor as soon as possible. A person who declined to be named said FF had held further negotiations with investors from Europe, the United States and the Middle East.
The equity financing right of US $500 million is crucial to FF, which can basically meet the mass production and delivery needs of FF 91. 'said the person. In July this year, in a supplementary agreement signed with FF, Evergrande promised to pay ff500 million US dollars in subscription funds this year. In dealing with FF's short-term cash flow difficulties, stifel will help FF tailor short-term debt financing solutions.
It is worth noting that FF has been trying to use the way of pledge of core assets for short-term loan before, but because Evergrande health, as the largest shareholder, applied for preservation of FF core assets, FF capital planning was blocked. Evergrande Health said in the announcement that the arbitration tribunal rejected FF's request to terminate the asset mortgage. However, FF disagreed, saying that 'the arbitral tribunal will make an award in another emergency relief arbitration. '
An investment agreement between Evergrande and FF disclosed by the media shows that as an investment condition, Evergrande has the right to unconditionally preserve FF assets through the 100% control subsidiary, season smart. However, if FF finds a third-party financial institution willing to make debt investment, Evergrande must unconditionally remove the intellectual property and asset preservation of all equipment.
In this regard, an FF insider said that stevier has made a comprehensive assessment of FF's existing assets. The net asset value of FF in the United States alone is more than $600 million, and the debt is only tens of millions of dollars. The assets are far greater than the liabilities. But FF is still in a precarious situation. Recently, the successive departures of the founders make FF even worse. At present, Jia Yueting has become the only founder of FF.
Although FF has shown a common feeling, for example, claiming that many executives have taken the initiative to reduce their salaries to help the company through the crisis. However, according to Sohu auto, citing foreign media reports, after Evergrande's cut-off, the 'top five foreign high-level teams' set up by Jia Yueting at the beginning of the foundation of FF have collapsed and all left. Nick Sampson, one of the founders who left last week, expressed a more gloomy view of the company's current situation and future.
However, the news released by FF officials is still full of excitement. According to FF insiders, since the first pre production vehicle came off the production line in advance on August 28, FF is now fully promoting the production of follow-up pre production vehicles to meet the test and verification needs before mass production. At present, FF still retains more than 500 core employees in R & D, manufacturing and supply chain, ensuring that core projects related to mass production and delivery of FF 91 are still in progress.
Recently, FF's official microblog showed that its first concept car ffzero1 is on display at the newly opened Mullin Gallery of Art Center, one of the top design schools in the United States.