SMM News: "the joint venture company landed in the Shaerqin Industrial Zone of Hohhot Economic and technological Development Zone, which is mainly promoted by the ninth city, all subject to the caliber of the company." On June 17, the person in charge of Faraday Future (hereinafter referred to as FF) said in an interview with reporters.
On June 10, the ninth city announced that it had signed a memorandum of understanding on strategic cooperation with the Office of the Development leading Group of the Shaerqin Industrial Zone of the Hohhot Economic and technological Development Zone (hereinafter referred to as the Memorandum). The two sides will carry out strategic cooperation on the settlement and development of the new energy vehicle joint venture company jointly established by FF and the ninth city in the Schalqin industrial zone. The memorandum is valid for three months.
However, a staff member in the Schalqin Industrial Zone of Hohhot said in an interview with the website, "the project is in contact. As the Internet said, the memorandum of understanding signed is valid for three months. At this time, we have to get to know each other in depth. See if the terms can be settled before we decide to cooperate."
According to the memorandum, if the two sides do not reach a final agreement within three months of signing the memorandum, the terms of the memorandum will expire. This means that it is unclear whether Jia Yueting's car-building project will land in Hohhot.
Mogan Mountain base at risk of recovery
In fact, the Schalqin Industrial Zone in Hohhot is the third automobile manufacturing base selected by Jia Yueting. The first two bases are the Economic Development Zone of Deqing County, Huzhou City, Zhejiang Province (Mogan Mountain Base) and Guangzhou Nansha bonded Port area (Nansha Base).
Under the agreement between FF and the ninth city, FF will provide its land use rights in China as the production base of the new joint venture. However, Nansha Base has been owned by Evergrande since its "peaceful breakup" with Evergrande at the end of last year. At present, FF has only Mogan Mountain production base.
It is worth noting that the ninth city filed with (SEC) in March this year made it clear that FF provided the joint venture with property rights and resources of its or affiliated companies, but did not include assets and interests directly or indirectly held by the Mogan Mountain government.
If the joint venture between the ninth city and FF ends up in Hohhot, the Mogan Mountain base of FF may be withdrawn by the local government. "if everything doesn't go according to plan, there's nothing we can do to get the land back." "We will do our best to retain the land use right of Mogan Mountain base," the FF official told reporters. "
According to public information, the largest of the seven plots of Mogan Mountain owned by FF covers an area of about 90.004 hectares, with an agreed completion time of 36 months. Based on the foundation laying in December 2016, it will be exactly 36 months by November 2019.
The Land Administration Law stipulates that the original approved land has not been completed within the agreed time. If it is not for government reasons, the local land administrative department has the right to recover the right to use the land; if it applies for the extension of the right to use, it will determine whether or not to approve the extension of completion according to the reasons for the extension.
"before the joint venture decided to settle in Hohhot, there was uncertainty about a lot of things." "if the joint venture does settle in Hohhot, it will be a hassle for FF, and the company will have to give Deqing Economic Development Zone a statement," a person familiar with the matter close to FF told reporters. "
With regard to the specific use of Mogan Mountain base, the reporter contacted the ninth city through a variety of channels, but as of press time has not received a reply.
Only an intention agreement was signed with Hohhot
In March, the ninth city of the Internet company signed an agreement with FF to form a joint venture to cooperate in the manufacture, marketing and operation of electric vehicles in China. "matters such as the establishment of the joint venture are carried out by the ninth city." The person in charge of the FF said in an interview with reporters.
Three months later, FF made new progress in its car-building project with the ninth city. Opening the official website of the ninth city, an official news draft entitled "Nine cities and Hohhot signed a memorandum of cooperation and FF joint venture company to obtain resources and financial support" came into view.
According to the Memorandum, the ninth city and the Shaerqin Industrial Zone will jointly set up a new energy industry fund. The ninth city and its subordinate enterprises will contribute not less than 500 million yuan (including funds for the purchase of industrial land and commercial land). The government contributed not less than 1.5 billion yuan (including financial subsidies, infrastructure, other commercial supporting construction, etc.). At the same time, the Schalqin Industrial Zone in Hohhot has also pledged to provide 4 billion yuan in project financing for new energy projects by recommending local industrial funds and banks to jointly provide interest-free, discount or low-interest loan support.
In addition, Hohhot Shaerqin Industrial Zone will reserve not less than 5000 mu of land supply for the joint venture project, and support the joint venture company to obtain new energy passenger vehicle production qualification.
"all the requests, including 5.5 billion yuan, have been put forward by the other side, but how to implement them and whether they can be implemented are 'two different things'. Any request can be made, and whether we can implement it or not is still unknown. " The staff of the Schalqin Industrial Zone in Hohhot said in an interview with China Investment Network.
The ninth city has not yet completed a capital injection of US $200 million.
In fact, since the joint venture with FF, the ninth city has accelerated the layout of new sources of energy, ranging from electric vehicle manufacturing and charging operating platforms to battery management system suppliers.
According to public information, on May 27, the ninth city announced that through its subsidiary and charging pile operating platform Shenzhen Yipulue Technology Co., Ltd. (hereinafter referred to as Yiple) signed a joint venture agreement, the two sides jointly formed a joint venture.
Subsequently, on June 17, the ninth city announced once again that the company and its wholly owned subsidiaries have reached an investment agreement with Kexin Power system Design Research Co., Ltd. (hereinafter referred to as Kexin Power), a supplier of electric vehicle power batteries and new energy storage and battery management systems, and its major shareholder, Camdank Solar Group, and the ninth city will acquire shares in Kexin Power by way of exchange of shares.
However, the current financial situation of the ninth city, which speeds up the layout of new energy, is not ideal. According to the ninth city 2018 report, the company's total revenue for the reporting period was just $2 million, down 33.63% from a year earlier; net profit for the reporting period was-$11 million. Zhu Jun, chairman and chief executive of Ninth City, saw the switch to new energy as an opportunity for the company to transform from an Internet company to a high-tech travel ecology company.
It is understood that in 2009, the ninth city lost the agency of "World of Warcraft", six consecutive years of losses, cumulative losses of 2 billion yuan.
An insider close to FF admitted in an interview that the $600m pre-injected into the joint venture with FF in the ninth city was not necessarily invested by one of the nine cities or would later join forces with other investment banks to inject capital into the joint venture.
In an interview with the media on April 17, the ninth city admitted that the ninth city will open a roadshow in Hong Kong with (AMTD), a Hong Kong investment bank, and (Maxim), a US investment bank, and hold talks with a number of investors and Hong Kong investment institutions, with a view to raising US $600m in three phases.
It is understood that according to the agreement reached with FF, the ninth city will complete the first phase of capital injection into the joint venture company in June this year, with an injection amount of US $200 million.
But the FF official told reporters that so far, he has not received any news that the ninth city has injected $200m into the joint venture.