Who wins and loses in the battle between Jia Yueting and Xu Jiayin?


Who wins and loses in the battle between Jia Yueting and Xu Jiayin?

Author: Wang Juanjuan

On November 30, 2017, Shi Ying reached an agreement to invest $2 billion in three years to SmartKing in three installments. The first requirement is to invest $800 million by the end of 2018, and then pay $600 million separately in the next two years.

Evergrande Health entered the Faraday Future (hereinafter referred to as "FF"), Xu Jiayin had brought about a turning point for Jia Yueting's dream of making cars, but the quiet time had only maintained for three months, the two sides entered the embarrassing situation of looking at each other's two hatred, the reasons for internal love complex.

On the evening of Oct. 7, Evergrande Health (00708.HK) announced that FF had burned out $800 million of Shiying's financing in half a year, and demanded an additional $700 million in advance payment. Jia Yueting, taking advantage of his position on the board of directors, demanded payment and filed a lawsuit against Shiying for deprivation of Shiying's assets. Close the consent of financing and terminate all agreements.

On the afternoon of Oct. 8, the silent day FF counterattacked that the only reason for the dissolution of the agreement with Evergrande was that Evergrande failed to meet its payment commitments within the validity of the agreement. Evergrande should not detain money and prevent FF from accepting other financing. FF denied that Jia Yueting had manipulated the board and accused Heng Da of multiple defaults.

According to Evergrande Health's original plan, Xia Haijun and Shi Shouming were originally nominated as chairman and director of the joint venture company Smart King, but they have not been in the joint venture at present. Too much discourse power.

Jia Yueting and Hengda Health hold a voting right of 10:1 per share, which is the main chip of Jia Yueting at present, but if FF can not achieve mass production delivery in the first quarter of 2009, Jia Yueting will lose the voting advantage and lose control of FF again after losing its core assets. Analysts believe that moving toward arbitration and making contradictions public is also one of the means by which Jia Yueting wants to retain control. But such a price is that FF may wean immediately, and the agreed financing can not be accounted for in the short term.

FF capacity is questioned

As early as September 2017, Jia Yueting sought financing for FF's presence in Hong Kong. At that time, the FF capital chain was on the verge of breaking down. Jia Yueting was exposed to mortgage several properties in California, USA, in return for investing in FF. Subsequently, FF broke out from the high level of internal conflict and was accused of "no external financing will go bankrupt".

In this situation, Hong Kong Shiying Limited (hereinafter referred to as "Shiying Company"), which is controlled by Chinalco Chairman Zhao Du, becomes a single shareholder of FF by controlling 45% of FF through the joint venture Smart King.

On June 25, 2018, Evergrande Health announced that Evergrande China (03333.HK), a major shareholder, provided the company with a three-year unsecured loan of HK $6.75 billion (about 5.6 billion RMB) with an annual interest rate of 7.6% to acquire 100% of the company's shares, thus indirectly realizing a 45% control over FF.

Since then, in August, Evergrande Faraday Future Intelligent Automobile (China) Group was formally established to take full responsibility for FF technology development and all production and management in China. In its mid-term earnings report for September 26, 2008, Evergrande Health once made new energy vehicles its second major business into the board's report. Just half a month later, the two sides accidentally split their faces.

According to Evergrande Health, Shiying initially reached an agreement with FF shareholder FFTop Holding (hereinafter referred to as "FF former shareholder") on November 30, 2017. Shiying invested $2 billion in SmartKing over three years in three installments. The first requirement was to invest $800 million by the end of 2018 and then on December 31, 2019. 600 million dollars were paid before and before December 31, 2020.

Evergrande Health said that on May 25, 2018, Shiying Company had fully paid the first $800 million in advance. But two months later, the former shareholder of FF proposed to Evergrande Health that Shiying's $800 million had been used up, demanding an additional $700 million in advance.

The burning rate of FF is obvious to all, and the possibility of mass production is questioned. On August 28, FF91's first production vehicle was offline. People close to FF told First Financial Reporter that FF91 was fired recently because of battery failure. FF asked employees to keep it secret, otherwise it would be dismissed. However, FF did not make a public response to this.

Who wins and who wins?

When it comes to investment, it looks like a timely rescue, but it costs a lot. Unlike Sun Hongbin, who is in charge of Music TV Network (300104. SZ), FF has a clear betting agreement with Shining. If FF can not achieve mass production delivery in the first quarter of 2009, Jia Yueting will lose the voting advantage and the actual control of FF.

To achieve mass production, a steady stream of capital is what FF needs most. In a statement on the afternoon of the 8th, FF said it was not at the company's request, but Evergrande took the initiative to sign a revised and supplementary investment agreement (tripartite agreement) in July and agreed to provide further financial support to FF before the original contract date, including the payment of 500 million of the remaining $1.2 billion in 2018.

"Although FF and its founder, Mr. Jia Yueting, have fulfilled all the terms of payment required under the tripartite agreement signed by the investors in July 2018, Evergrande has failed to meet its commitment to pay any additional funds to FF, except for the first investment of $800 million." FF accused Evergrande of trying to gain control and ownership of all FF IPs in China and FF, in addition to not being promised. During that period, Hengda also prevented FF from accepting any direct financing from other sources.

People familiar with the matter told reporters that there were other contradictions. Evergrande has always wanted to send its own people into FF, also want to fully agency FF in the domestic business, for this also made a lot of investment, in this respect and Jia Yueting disagreement.

In addition to real gold and silver, in April this year, the media reported that FF's domestic affiliate, Ruichi Automobile, spent 364 million yuan to build cars in Guangzhou, which has been greatly assisted by Hengda. In the June 25 acquisition announcement, Evergrande Health also said FF has a comprehensive R&D and production base in Guangzhou. In addition, Hengda also plans to send Xia Haijun and Shi Shou Ming as chairman and director of SmartKing. Xia Haijun currently serves as vice chairman, president and executive director of the board of directors of Hengda Group, while Shi Shouming serves as chairman and executive director of Hengda Health.

Analysts believe that this appeal also reveals that without Hengda's consent, the next bidder can not enter the board, to arbitration, the contradictions will be open, Jia Yueting wants to retain control of one of the means. But such a price is that FF is likely to wean immediately, and the progress of mass production is bound to be affected.


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