Picture: Lordstown Motors
Foxconn is increasing its investment in Lordstown Motors by buying $170 million in common stock and newly created preferred shares.
Once complete, the deal will see Foxconn hold all Lordstown’s outstanding preferred stock and 18.3% of its common stock on a pro forma basis. The companies also said, earlier this week, that Foxconn will also have the right to two board seats.
Back in 2021, Lordstown sold its 6.2-million-square-foot Ohio factory to Foxconn, and as part of that $230 million deal, Foxconn had agreed to help Lordstown Motors manufacture its Endurance pickup truck. Production of the truck began in September 2022.
This new deal will replace the joint venture funding announced last year by Foxconn and Lordstown Motors. The investment is subject to review by the Committee on Foreign Investment in the United stated.
Foxconn is to purchase 12.9 million shares of common stock at a purchase price of $1.76 per share which will result in proceeds of $22.7 million. Foxconn will also buy 300,000 shares of preferred stock at $100 per share resulting in proceeds of $30 million.
“Since announcing our first transaction with Foxconn more than a year ago, it has been our objective to develop a broad strategic partnership that leverages the capabilities of both companies. Foxconn’s latest investment is another step in that direction,” Lordstown Motors executive chairman Daniel Ninivaggi said in a statement.
The companies have said the fresh injunction capital will plan to be used to fund development and design activities for a new electric vehicle program in partnership with Foxconn.