Shares soar more than 30% after hours as electric car startup Lordstown completes deal with Foxconn factory

Source: Sina Finance

Shares of U.S. electric vehicle startup Lordstown Motors (RIDE.US) surged more than 30% in after-hours trading on Wednesday after the company announced it had completed converting a former General Motors (GM.US) factory in Ohio. The sale to Foxconn brought much-needed funding.

The $230 million deal was announced in November last year, but there have been recent concerns that Lordstown may be running into a cash crunch. Earlier this week, the company reported that it had $244 million in cash and cash equivalents at the end of 2021.

The deal brings total benefits to Lordstown of $230 million, plus approximately $27 million in operating and expansion costs. Foxconn also bought $50 million worth of stock directly from Lordstown.

Foxconn took over the plant immediately after the deal, the companies said, and about 400 workers at the plant were converted to Foxconn employees.

The two companies also signed a contract manufacturing agreement on schedule and announced a joint venture to jointly develop other electric vehicle projects, including a new electric vehicle platform. The joint venture, called MIH EV Design LLC, will be 55 percent owned by Foxconn and 45 percent owned by Lordstown. Foxconn committed $100 million to the new business, including a $45 million loan to Lordstown to “support its initial capital commitment,” the companies said.

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