Oct 01, 2021 (Baystreet.ca via COMTEX) -- Lordstown Motors /zigman2/quotes/211334938/composite RIDE -2.04% has entered into an in-principle agreement to sell its massive assembly plant in Ohio to iPhone maker Foxconn for $230 million, the companies announced late Thursday.
Under the deal, the Taiwan-based electronics contract manufacturer will assemble Lordstown Motors' first product, an all-electric pickup truck called the Endurance, that the company was preparing to produce and sell beginning next year.
Selling the plant to Foxconn, also known as Hon Hai Technology Group, will provide capital for the cash-strapped electric vehicle startup, while giving Foxconn a jump start to producing EVs. Foxconn also has a deal with start-up Fisker /zigman2/quotes/209924856/composite FSR -4.82% to produce EVs in the coming years.
"The partnership would allow Lordstown Motors to take advantage of Foxconn's extensive manufacturing expertise and cost-efficient supply chain, while freeing up Lordstown Motors to focus on bringing the Endurance to market, developing service offerings for our fleet customers and designing and developing innovative new vehicle models," Lordstown CEO Daniel Ninivaggi said in a statement.
Under the proposed deal, Foxconn also will purchase about $50 million of Lordstown common stock. The EV start-up plans to then enter into a long-term lease for a portion of the former General Motors plant, and Foxconn will offer jobs to Lordstown operational and manufacturing employees.
Bloomberg first reported the companies were "near an agreement" earlier in the day, sending Lordstown shares up by as much as 21% on Thursday before retreating to close at $7.98, up 8.4%. The price rode lower 41 cents, or 5.2%, to $7.56 in Friday trading.
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