Lordstown Motors mentioned on Friday it plans to take authorized motion towards investor Foxconn to make sure that the Taiwanese contract producer completes a deliberate buy of almost 10% of the electric vehicle startup’s shares.
The corporate, and its EV friends have been struggling as entry to capital tightens from rising rates of interest and financial uncertainty.
The cash-strapped EV maker had warned earlier it is likely to be pressured to file for chapter, citing uncertainty over a $170 million funding cope with Foxconn by way of which the Taiwanese firm would maintain a near-20% stake within the money-losing U.S. agency.
It presently holds a bit of over 8% within the firm, as per Refinitiv knowledge.
Foxconn has since invested $52.7 million and is balking at buying extra shares, citing a breach of their settlement, Lordstown mentioned.
On Friday, the U.S. firm, named after the city in Ohio the place it’s based mostly, mentioned in a submitting it believed Foxconn was unlikely to finish the promised buy, citing a letter the contract producer despatched Lordstown earlier this month, during which the Taiwanese firm didn’t acknowledge the next frequent closing.
“The corporate believes that Foxconn’s numerous breaches of the funding settlement and sample of unhealthy religion have brought about materials and irreparable hurt to the corporate,” Lordstown added within the submitting.
Foxconn didn’t instantly reply to a Reuters request for remark.
Lordstown, whose shares has tumbled greater than 80% this 12 months, additionally mentioned in Could it might have to stop making the Endurance pickup truck within the close to future until it finds a companion.