Lordstown Motors (NASDAQ: RIDE) has evidently reached an arrangement with Hon Hai technology Group, whom is better known worldwide as Foxconn, whom produces Apple’s iPhone’s among other products. The arrangement is referred to as an “agreement in principle.”
The arrangement will see the two firms partner for the production of electric vehicles at Lordstown’s Ohio production plant. While not presently binding, the agreement outlines a scenario whereby Foxconn is to acquire the plant, excluding certain of its production assets, for $230 million.
In connection with the sale of this facility, a contract manufacturing agreement would be entered into, whereby Foxconn is to produce Lordstown’s Endurance pickup trucks at the facility, while also providing rights related to production of future vehicle models developed by the company. Lordstown would also lease a portion of the facility for certain operations.
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Employment wise, the impact to employees is expected to be minimal, with current employees to either remain with Lordstown or transition to Foxconn, depending upon their current role.
In connection with the arrangement, Lordstown is to issue 1.7 million warrants to purchase shares at a price of $10.50 per share to Foxconn, which are valid for three years. Separately, Foxconn is to also invest $50 million into Lordstown at a price of $6.8983 per share.
Aside from Lordstown, Foxconn has indicated that it also intends to produce electric vehicles branded for Fisker Inc at the production facility, along with other electric vehicle manufacturers.
Lordstown Motors last traded at $7.98 on the Nasdaq.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
