LORDSTOWN, Ohio — Lordstown Motors announced the sale of its facility to Taiwan's Hon Hai Technology Group (Foxconn) on Wednesday as part of a $230 million definitive Asset Purchase Agreement.
The announcement comes following an Agreement in Principle (AIP) between the two sides on September 30 in which they agreed to work jointly on Lordstown Motors’ electric vehicle programs in the production and assembly plant in Lordstown, Ohio. Foxconn also purchased approximately $50 million of Lordstown Motors' common stock at a price of $6.8983 per share at the time.
Here are the terms of the agreement:
- LMC has agreed to sell to Foxconn the Lordstown facility, excluding certain assets such as the hub motor assembly line and battery module and pack lines, for $230 million.
- Foxconn has agreed to make a down payment of the purchase price of $100 million by November 18, and subsequent down payments of $50 million on each of February 1, 2022 and no later than April 15, 2022. The balance of the purchase price will be paid at closing.
- The parties have agreed to pursue a contract manufacturing agreement for the Endurance pickup truck, which must be entered into before closing—currently targeted by April 30, 2022.
- Lordstown Motors and Foxconn will pursue a joint venture agreement to co-design and develop vehicle programs for the global commercial fleet market, using the MIH open platform. Lordstown and Foxconn would have the right to commercialize these new EV programs in North America and internationally.
- 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.
Among those who applauded the agreement was Rep. Tim Ryan (D- OH 13), whose district includes Lordstown. "Foxconn knows what our Valley workforce is capable of, and I am confident they will make the Mahoning Valley the North American hub for electric vehicle production. I stand ready to continue to do everything in my power to support Foxconn and Lordstown Motors to further cement Northeast Ohio as America’s Voltage Valley," Ryan wrote in a statement.
“This partnership marks the commencement of integrating our resources with Lordstown Motors to develop Ohio into Hon Hai’s most important electric vehicle manufacturing and R&D hub in North America," said Young Liu, Chairman of Hon Hai Technology Group, in a statement. "As we look to inject Hon Hai’s software and hardware capabilities in the information and communications industry with the wealth of automotive experience that resides in this town and our partners, we will be able to provide customers with more real-time and efficient Electric vehicle products.”
Also on Wednesday, Lordstown Motors announced a new executive management team to join CEO Dan Ninivaggi:
- Edward T. Hightower has been appointed as president of Lordstown effective November 29th, 2021. He currently serves as Managing Director of Motoring Ventures LLC and has been advising Lordstown in a consulting capacity.
- Shea Burns has been appointed as senior vice president
- Jane Ritson-Parsons, who has been serving as chief operating officer, has been appointed to the newly-created position of executive vice president—chief commercial officer.
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