Lordstown Motors Corp RIDE said Monday that Hon Hai Precision Industry Co., Ltd HNHPF affiliate Foxconn Ventures Pte. Ltd has agreed to make an additional $170 million equity investment in the electric vehicle firm.
What Happened: The investment will come in the form of $70 million of Lordstown's common stock and up to $100 million of a newly created Series A convertible preferred stock.
"Foxconn is expected to hold all of LMC’s outstanding Preferred Stock and 18.3% of its Common Stock on a pro-forma basis, and will have the right to designate two members of LMC’s Board of Directors," said Lordstown in a statement.
Foxconn, a key Apple Inc AAPL supplier, is expected to conclude the initial closing on or around Nov. 22.
See Also: How To Buy Electric Vehicle (EV) Stocks
Why It Matters: Lordstown said it will use the proceeds from the sale of preferred stock to "fund development and design activities for a "new electric vehicle program in collaboration with Foxconn."
The $100 million direct preferred stock investment replaces the joint venture funding previously announced by the two companies.
The recent announcement comes after the struggling automaker said in May that it had closed a $230 million deal to sell its Ohio factory to Foxconn.
Price Action: On Monday, Lordstown shares shot up 19.5% higher to $2.21 in extended trading after closing 4.15% lower at $1.85 in the regular session, according to Benzinga Pro data.
Photo courtesy: Lordstown Motors
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