Lordstown Motors (RIDE) - Get Lordstown Motors Corp. Class A Report shares jumped Thursday after the electric-vehicle maker finalized an accord to sell its Lordstown, Ohio, plant to Taiwan’s giant contract manufacturer Foxconn for $230 million.
The company can use the infusion. In June, it warned investors that it could run out of cash amid accusations of accounting irregularities.
Foxconn, also known as Hon Hai Technology, has agreed to make a down payment of $100 million by Nov. 18, and subsequent payments of $50 million each on Feb. 1 and no later than April 15.
The balance of the purchase price will be paid at closing.
The companies agreed to pursue a contract manufacturing agreement for the Endurance pickup truck, which must be entered into before closing, currently targeted by April 30.
Upon the closing, Foxconn will receive 1.7 million warrants to acquire Lordstown common stock, exercisable for three years, at a price of $10.50 per share.
Lordstown recently traded at $6.39, up 15%. It has traded on Thursday up as much as 21% at $6.75.
The two companies have a joint venture agreement to co-design and develop vehicle programs for the global commercial fleet market.
Lordstown and Foxconn would have the right to commercialize these new EV programs in North America and internationally.
On Wednesday Lordstown unveiled a bevy of executive appointments. That included naming auto industry veteran Edward Hightower as president effective Nov. 29, succeeding Rich Schmidt, who stepped down from the position.