*Shares of Lordstown motors, a US electric vehicle start-up, soared more than 30% after trading on Wednesday *, after the company announced that it had completed the sale of a former General Motors plant in Ohio to Foxconn and obtained much-needed funds.
The $230 million deal was announced last November, but recently there have been concerns that Lordstown could fall into a shortage of funds. Earlier this week, the company reported that it had $244 million in cash and cash equivalents at the end of 2021.
The deal brought Lordstown a total revenue of $230 million, plus about $27 million in operating and expansion cost compensation. Foxconn also purchased $50 million worth of shares directly from Lordstown.
The two companies said Foxconn took over the plant immediately after the transaction was completed, and about 400 employees of the plant were converted to Foxconn employees.
The two companies also signed a contract manufacturing agreement as scheduled and announced the establishment of a joint venture to jointly develop other electric vehicle projects, including a new electric vehicle platform. The joint venture, MIH EV Design LLC, will be 55% owned by Foxconn and 45% owned by Lordstown. The two companies said Foxconn had committed $100 million to new businesses, including a $45 million loan to Lordstown to "support its initial capital commitment".