Electric-vehicle maker Faraday Future has agreed to go public through a merger with blank-check firm Property Solutions Acquisition Corp in a deal valuing the combined entity at $3.4 billion, the latest firm to take the SPAC route to enter public markets.
The Los-Angeles-based startup joins a growing list of EV makers in a hot sector that includes Tesla Inc as the adoption of electric vehicles grows across the world.
Fisker Inc and Nikola Corp also went public through SPACs last year.
Faraday and Property Solutions said on Thursday the deal, supported by a private investment of $775 million, is expected to fetch Faraday Future $1 billion in gross proceeds.
SPACs have emerged as a popular way for firms seeking to go public to deal with less regulatory scrutiny and provide more certainty about valuation than traditional initial public offerings (IPO).
SPACs such as Property Solutions are shell companies that raise money through an initial public offering to take another company public within two years. Last July, Property Solutions raised around $200 million in its own IPO.
Faraday Future was founded in 2014 by former chief executive officer, Jia Yueting, who filed for bankruptcy in October 2019 and planned to turn over his stake to repay around $2 billion in personal debts. Yueting is now serving as the chief product and ecosystem officer at the company.
The combined company will be listed on Nasdaq under the ticker symbol “FFIE”, the companies said.
Reporting by Niket Nishant and Sohini Podder in Bengaluru; Editing by Shinjini Ganguli
Source: Reuters