Faraday Future plans to build a $1 bn electric car plant in North Las Vegas. However, Nevada Treasurer Dan Schwartz says the state will not issue $120 mn in bonds to pay for supporting power lines, water mains, and roads until he is convinced Faraday owner Jia Yueting has the money to build the plant.
The crux of Schwartz’s concern is Jia’s reliance on equity-backed loans, a financing strategy that could leave Nevada taxpayers vulnerable to the whims of China’s volatile stock market. Jia has pledged 87 percent of his holdings in Leshi Internet Information & Technology — his flagship firm — for cash he then plowed back into his companies, regulatory filings show.
The stock, whose trading was halted in Shenzhen for the first five months of 2016, has dropped 11 percent since it resumed trading June 3, a move that heightens Schwartz’s fear that a margin call could prevent Jia from funding the plant.