Lordstown Motors wins $170 million investment deal with Foxconn
(Bloomberg) — Lordstown Motors Corp. has agreed to sell a large stake and give two board seats to manufacturing partner Foxconn Technology Group, replacing the previous arrangement to produce electric vehicles with a new deal.
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Foxconn will invest up to $170 million in the company by purchasing preferred stock and 18.3% of common stock, according to a statement on Monday. The deal will require a review by the Committee on Foreign Investment in the United States.
Lordstown shares jumped 11% as of 5:27 p.m. in New York.
The move deepens ties between the two companies, giving Foxconn a significant voting interest over the next two years as they jointly pursue a newly announced EV development program. Lordstown sought to build an electric endurance pickup truck with capital from Foxconn, which had ambitions to grow in the electric vehicle market.
“It strengthens the strategic partnership with Foxconn,” Dan Ninivaji, president of Lordstown, said in an interview. “It is another step in that direction. It also provides us with capital for our jointly developed EV program.”
Foxconn, the Taiwanese manufacturer known as the iPhone maker for Apple Inc. , purchased 9.9% of the company without CFIUS review, but would need US government approval to bypass this. Assuming approval of the transaction, Foxconn could own up to 19.9% of the ordinary voting shares. Even if Foxconn buys more shares, Ninivaggi said, it can’t exceed that amount of voting shares.
Foxconn completed the purchase of the Lordstown, Ohio plant earlier this year.
Separately, Lordstown on Monday announced third-quarter results, revealing an operating loss of $154.8 million.
(Updates with additional details begin in third paragraph)
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