The world's largest electronics Foxconn Technology Group is planning to terminate investment transactions with American electric vehicle manufacturers LordStown Motors, which may force LordStown to apply for bankruptcy protection.
Comprehensive Bloomberg and Wall Street Journal reported that LordStown Motor Company said on Monday (May 1) that it had received a notice from Foxconn, sayingIt does not comply with Nasdaq's listing rules and also violates the trading terms.Foxconn also said that if LordStown cannot solve the breach of contract within 30 days, the company will terminate investment transactions.
LordStown subsequently responded in the regulatory announcement that if the dispute with Foxconn cannot be resolved, the company may need to reduce or stop operation and seek bankruptcy protection.
LordStown spokesman said that Foxconn's behavior has no basis, and this has caused the company to be substantially harmful to the company and may not be able to make up.
Only half a year ago, Foxconn announced that it would invest $ 170 million to purchase LordStown shares and obtain two board seats of LordStown.Foxconn will purchase LordStown's preferred shares and 18.3 % of ordinary shares, thereby investing as high as US $ 170 million.This will deepen the relationship between the two companies and let Foxconn get a greater voting right in the next two years.
In addition, Foxconn also spent $ 230 million to acquire the former U.S. General Motor Factory in Ohio. It plans to produce the first LordStown electric truck Endurance in accordance with the cooperation agreement with LordStown.
As the cost is higher than the target price of $ 65,000, LordStown asked Foxconn to suspend production in January this year, and said that it would find another partner to share the cost of car manufacturing.LordStown said last month that Endurance electric trucks have resumed production at a "very low speed" situation.
