[{"_1":2,"_100":-5,"_101":-5},"loaderData",{"_3":4,"_6":7},"root",{"_5":-5},"user","routes/tag.$slug",{"_8":9,"_89":90,"_97":92,"_98":72,"_99":73},"posts",[10],{"_11":12,"_13":14,"_15":16,"_17":18,"_19":20,"_21":22,"_23":24,"_25":26,"_27":28,"_29":30,"_31":32,"_33":-5,"_34":35,"_36":37,"_51":52,"_82":83,"_84":85,"_86":87,"_88":32},"documentId","az3sjoszd5ni0lyg24tvqspd","title","Once Among the Richest on Forbes, Now He Has Traded the Dream for 300 Million USD","slug","once-among-the-richest-on-forbes-now-he-has-traded-the-dream-for-300-million-usd","excerpt","LeEco founder Jia Yueting is welcoming his second white knight after investments by Sun Hongbin, billionaire real estate developer and the founder and chairman ...","content","LeEco founder Jia Yueting is welcoming his second white knight after investments by Sun Hongbin, billionaire real estate developer and the founder and chairman of Sunac China Holdings. This white knight came with 300 million U.S. dollars in hand.\n\n

\n\nChairman of Evergrande Group Xu Jiayin has confirmed their investments in Jia Yueting's Faraday Future (FF), an electric vehicle company, and has set up a specialized auto team for it.\n\n[caption id=\"attachment_6785\" align=\"aligncenter\" width=\"720\"] $\"\"$ Yueting Jia & Jiayin Xu[/caption]\n\nAccording to anonymous insiders, the Hong Kong-based fund of Evergrande Group invested in an offshore company FF registered in Cayman Islands at the end of 2017, with a total investment of approximately $300 million. At the time of investment, FF's valuation was about 1.5 billion, which means Evergrande Group now may hold 20% of FF's shares through its Cayman Islands company.\n\nAccording to other reports, Jia Yueting has given up his status as FF's major shareholder to Evergrande Group in exchange for a lock-in on the CEO position for the next 15 years.\n\nJust like that, Jia Yueting sold the dream of building his own EV empire to Evergrande for merely 300 million U.S. dollars. Jia Yueting was reported to be worth $4.5 billion in 2016 by Forbes and was once the 37th richest person in China.\n\nAccording to above sources, the financial consortium headed by Evergrande Group gave $100 million to FF before and after the signing of the investment agreement to help the FF overcome their difficulties.\n\n\"Evergrande's investment is a life-saver, otherwise FF may be in danger of bankruptcy,\" according to sources.\n\nFrom this point of view, the news that FF acquired financing at the end of last year was not just a rumor. At that time, Jia Yueting announced the news at an internal staff meeting, and it was publicized during FF's first global supplier conference in February. Jia Yueting announced that Faraday Future would receive $1.5 billion of financing, which basically meets the needs for equity financing prior to IPO and promised to deliver the first batch of vehicles at the end of 2018.\n\nJust last week, Ruichi Smart Motors or Ruichi Auto, an affiliate of FF Electric Vehicles, won the auction of a commercial land of over 600 acres in the Nansha Port Area in Guangzhou for 364 million yuan ($57.9M), which will be used for the assembly of electric vehicles. It plans to start development and construction within one month after the date of land transfer, and it will be completed and put into operation within 24 months. Some current employees of the former LeTV have also been assigned to FF China.\n\n[caption id=\"attachment_6786\" align=\"aligncenter\" width=\"720\"] $\"\"$ Location of FF's newly acquired land[/caption]\n\nAccording to Tencent, Xu Jiayin was probably helping FF's affiliate Ruichi Auto to acquire land in Guangzhou.\n\nAs a real estate giant, Evergrande's purpose behind investing in FF is still unknown, perhaps their focus is not on electric vehicles, but something else.\n\nIn 2016, Evergrande won the property development right of Longhua Land through the acquisition of Kingboard Chemical Holdings Ltd. for 2 billion yuan ($318M). The land tenure was 50 years, and it was subsequently developed as a real estate renovation project.\n\nSeeing previous failures of Lancapital Holdings Group and Sunac China Holdings, anyone who wants to take over the mess left by Jia Yueting will be taking huge risks. However, it is undeniably that the FF, seen as unpromising by many, has not lost its competitiveness in the capital market.\n\nThis is also related to the larger environment. After all, FF is still somewhat famous in the automobile manufacturing industry. With today's trend of calling for the return of manufacturing, it is easy to take advantage of policy benefits. It is evident in the government ties of Lancaptial Holdings and Sunac China Holdings.\n\nIn 2016, LeTV drew the blueprint of “Auto City” in Deqing, Zhejiang. At that time, it received strong support from the local government; LeTV even held an inauguration ceremony in the Great Hall of the People in Zhejiang Province. The same thing happened in Guangzhou this time with the land acquisition. Sources reveal that the land was already set to be given to Ruichi Auto prior to the auction. Within 5 minutes after the start of auction, Rui Chi Auto won the bid for the minimum sales price of 364.1 million yuan ($57.9M).\n\n[caption id=\"attachment_6787\" align=\"aligncenter\" width=\"720\"] $\"\"$ The now abandoned project of LeTV Deqing Auto City[/caption]\n\nWith the support of Xu Jiayin from Evergrande and relevant government policies, Jia Yueting's dream of building an EV empire might not be entirely impossible to realize.\n\nThe biggest problem at the moment is that Jia Yueting, already in the bad books of instituitional and individual investors, has long overspent his credit.\n\nLast year, there were repeated rumors on FF's new financing, while the rumored lead investors were also changing constantly from Alibaba to Richard Li Tzar Kai, the son of businessman Li Ka-Shing. However nothing concrete was ever reported, thus these farces were interpreted as Jia Yueting’s tricks for coaxing investment.\n\nJudging from the current situation, FF has always been on the verge of bankruptcy, and its capital chain could break down at any time.\n\nMass production of EVs is still in the unforeseeable future. It is reported that the American plant of FF is still under renovation, and it is unknown when production will begin.\n\nSince the end of last year, Jia Yueting has been put on the defaulters list repeatedly by Chinese courts. His wife Gan Wei who has returned to China from the U.S. to deal with debt problems is now receiving the same treatment. This will definitely bring a lot of resistance to the future development of FF in China.\n\nThere are still many problems facing Jia Yueting and Xu Jiayin, but at least for now it seems that FF who took both the money and the land has taken another step towards doing everything to realize one's dreams.\n\n

This article originally appeared in huxiu and was translated by Pandaily.

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Tag: #Jiayin Xu

Once Among the Richest on Forbes, Now He Has Traded the Dream for 300 Million USD