Evergrande "made a car" to become true 6.7 billion Hong Kong dollars into the main FF

On June 25, Evergrande Health (00708, HK) issued a notice stating that the company and the seller entered into an agreement to acquire 100% of the shares of Hong Kong Shiying Company for a total consideration of HK$6.746 billion, thereby indirectly obtaining a 45% stake in Smart King. According to the information, Smart King wholly owns Faraday Future (Faraday Future, hereinafter referred to as FF), while Hong Kong Shiying Company is the largest shareholder of Smart King (holding 45%). Through this equity transaction, Evergrande will indirectly hold a 45% stake in FF.

For the industry's attention to the subsequent operation of FF, on June 25, the relevant person in charge of FF responded that “the company's dominance is in the form of AB shares, and Jia Yueting has super voting rights, including the board of directors, daily operation management, investment conference, etc. Aspect): In terms of board composition, FF has five board seats, while Evergrande has two board seats. FF also has absolute control over the board."

FF will adopt AB stock mode

According to the announcement of Evergrande Health, in November 2017, Hong Kong Shiying Company and the original shareholder of Faraday Future, a US new energy automobile company represented by Jia Yueting, jointly established a new company, Smart King. Shiying Company invested US$2 billion to acquire a 45% stake in the new joint venture Smart King, while FF's original shareholder acquired the 33% equity of the joint venture company with FF's technical assets and business shares, and the remaining 22% equity will be reserved as equity incentives. Company management.

Because Smart King wholly owns FF, Evergrande will indirectly become the largest shareholder of FF through this equity transaction.

"When Evergrande enters FF, Jia Yueting will officially become the CEO of the company. He will continue to be responsible for the various business operations of FF with the existing management team." FF related person in charge revealed that FF will adopt AB shares in the future. Mode, as the founder and CEO, Jia Yueting enjoys the “1 share and 10 votes” power and will strive to ensure the realization of FF's innovative mission and vision. The strength and rich experience of Evergrande Health and Evergrande Group will also provide assistance and reference for FF in operations management and resource integration, helping the company to achieve rapid development.

Evergrande said that according to the agreement, at the annual and special shareholders meeting of the new company, each share held by Evergrande has one vote, and the shares held by the former shareholders of FF have 10 votes. However, in the case of default of FF's original shareholders, the voting rights will be reversed, and the special voting rights will be transferred to Evergrande. The shares of the management equity incentives do not have any voting rights.

According to the Evergrande Health Announcement, the Target Company (Hong Kong Shiying Company) will appoint two directors to the joint venture company (Smart King), one of whom will serve as the chairman of the joint venture company. Evergrande Health intends to nominate Mr. Xia Haijun as the Chairman of the JV Company and intends to appoint Mr. Xia Haijun as the above position as soon as possible after the completion of the settlement under the Share Sale and Purchase Agreement. As at the date of the announcement, Mr. Xia Haijun served as Vice Chairman, President and Executive Director of China Evergrande. At the time of Evergrande Health's proposed nomination, Mr. Shou Ming served as another director of the joint venture company, and Mr. Shi Shouming was the chairman and executive director of the company.

FF related person in charge said that in terms of the composition of the (Smart King) board of directors, FF has five board seats, while Evergrande has two board seats. FF also has absolute control over the board of directors.

According to informed sources, when FF was in financial difficulties, it also contacted investors from many countries and regions, including Evergrande and Hong Kong Shiying Company. When Evergrande conducted a due diligence on FF to assess its value, Hong Kong Shiying Company took the lead in signing a transaction agreement with FF. After Evergrande's evaluation of FF, it decided to initiate an acquisition to Hong Kong Shiying Company's premium. At this time, the relevant transaction was approved by CFIUS on June 18.

It is understood that the mass production and delivery of the FF91 is currently in full swing. On June 7, FF announced that its plant in Hanford, California, had officially obtained permission from the local government and announced the general contractor of the plant. The first batch of production equipment has been installed and tested, and large-scale recruitment of local production and technical support for Hanford has also been fully launched. At the same time, FF is still expanding its product line in accordance with the established plan, and the development and business layout of subsequent models have already begun.

"In the near future, FF will usher in a major breakthrough in the Chinese market." FF told the "Daily Economic News" reporter that FF has now fully landed in China, Guangzhou Nansha factory has officially landed and started construction. Together with the Beijing office and the Shanghai Research Center, FF will continue to deepen the Chinese market.

Evergrande enters new energy

According to the information provided by FF, after the financing in December 2017, the valuation of FF is 4.45 billion US dollars, Evergrande will hold 45% of its equity, Jia Yueting holds 33% of the shares, and the remaining 22% is owned by the company's management.

The reporter noted that as early as February 14 this year, FF had revealed that it had successfully completed equity financing, and then there were industry insiders speculating that the gold lord behind it was Evergrande. In April, it was reported that Xu Jiayin, the chairman of Evergrande Group, had confirmed the investment of FF of Jia Yueting and set up a special automobile team. According to the data, Ruichi Automobile, which is wholly-owned by FF Hong Kong, has successfully won a land of 406,800 square meters (about 601 acres) in the processing and manufacturing block of Wanqingsha Bonded Port in Nansha District for 364 million yuan. It is understood that Smart King wholly owns “FF Hong Kong”.

What is the difference between Guangzhou Nansha Land and US FF Hanford Factory? What is the specific division of labor? The relevant person in charge of FF said that FF is implementing a strategy of dual-home and global production in China and the United States. Among them, the FF91 is mainly produced in the US market, and the Nansha base in Guangzhou is used to produce the follow-up models of the FF.

It is worth mentioning that FF announced on the afternoon of June 25 that after the approval of the US government for nearly half a year, the first round of financing with a total amount of US$2 billion was approved by the Committee on Foreign Investment in the United States (CFIUS). According to the reporter, the $2 billion of the first round of FF financing came mainly from Hong Kong Shiying Company, which has been 100% owned by Evergrande.

Funds were once the biggest obstacle to the development of FF. FF believes that the addition of this strategic investor will greatly ease the financial pressure of FF. Regarding the main use of the first round of financing of 2 billion US dollars, the relevant person in charge of FF said that at present, the funds are mainly focused on product research and development, factory construction and team building.

In fact, Evergrande's investment in FF can be seen from some recent actions. On April 9 this year, when Evergrande signed a comprehensive cooperation agreement with the Chinese Academy of Sciences, Xu Jiayin said that Evergrande plans to invest 100 billion yuan in the next ten years in life sciences, aerospace, integrated circuits, quantum technology, new energy, and labor. Key areas such as intelligence, robotics, modern science and technology agriculture, and the Chinese Academy of Sciences have jointly created the “three major bases” that lead cutting-edge technology.

It can be seen that new energy is an important aspect of Evergrande's future layout, and FF is involved in new energy vehicles.

The reason why it entered the FF is mainly to look at its R&D technology and product strength in the field of new energy vehicles. "FF has comprehensively led the industry standards in a number of technical indicators, and has realized technological changes in six major areas such as power systems, vehicle platforms, autonomous driving, artificial intelligence, computing platforms, and Internet systems." Evergrande believes that FF is about to measure The performance and technical indicators of the model FF91 have reached the world's top level.

Some investors have bluntly told reporters that the new enthusiasm for investing in new energy vehicles by investing in new vehicles seems to have become a trend. This is also one of the main purposes of real estate developers who are not short of money to invest in new vehicles.