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Foxconn Ventures Pte Ltd. is acquiring a stake in Lordstown Motors Corp., and this was confirmed on Monday, Nov. 7. The Taiwanese electronics firm is investing up to $170 million in the deal.
As per Reuters, with the amount of stake that Foxconn is set to buy, it will become the largest shareholder in Lordstown Motors. The firm will acquire a total of 12.9 million shares on or after the initial closing on Nov. 22 at a purchase price of $1.76 per share. This will result in total earnings of $22.7 million and an additional 300,000 shares of Preferred Stock at the price of $100 per share, which is equivalent to the proceeds of $30 million.
Lordstown Motors will use its earnings from the stake sale to fund the development and design projects for its new electric vehicle program. It was stated in the agreement that Foxconn would also be working with the EV maker on this project.
At any rate, the $100 million direct Preferred Stock investment is replacing the joint venture funding that was announced by Foxconn and Lordstown last year. As they cancel their first JV deal, shares of Lordstown increased by seven percent to $2.06 in extended trading on Monday.
“Since announcing our first transaction with Foxconn more than a year ago, it has been our objective to develop a broad strategic partnership that leverages the capabilities of both companies,” Lordstown Motors’ executive chairman, Daniel Ninivaggi, said in a press release, “Foxconn’s latest investment is another step in that direction.”
The executive chairman added, “Our Board of Directors and management team strongly believe that deep collaboration with the Foxconn EV ecosystem, including the Mobility-in-Harmony (MIH) open-source platform, offers tremendous opportunities to meet our mutual ambition to accelerate EV adoption globally.”
Ninivaggi is looking forward to having the representatives of Foxconn onboard the company’s Board. They will also be exploring other possible businesses for future collaborations that will further deepen their partnership.
Meanwhile, Foxconn already started building Lordstown Motor's Endurance pickup trucks in September. The production began after the Taiwanese firm bought the EV maker’s production plant in Ohio.
Photo by: Lordstown Motors/YouTube
