U.S. electric truck startup Lordstown Motors said on Monday that it had reached an agreement with Foxconn subsidiary Foxconn Ventures Pte Ltd. According to the agreement, Foxconn will invest up to 170 million US dollars in Lordstown, becoming the largest shareholder of the latter.
Under the agreement, Foxconn will purchase 12.9 million Lordstown shares on or after Nov. 22, followed by an additional 26 million shares, which would bring Foxconn's share of Lordstown common stock and all preferred stock to 19.3 percent. That would exceed the 17.2 percent stake held by Lordstown founder Stephen Burn, according to financial information provider Refinitiv.
Lordstown said in a filing that the company will use the proceeds from the sale of shares to fund development and design activities on a new electric vehicle project with Foxconn, canceling a previous joint venture agreement with Foxconn. The two parties will jointly develop their first electric car but declined to comment on details.
Shares in Lordstown rose 7 percent to $2.06 in after-hours trading Monday on the news.
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