Chinese billionaire Jia Yueting files for bankruptcy in US owing $2bn as his electric car company Faraday drowns in debt
- Jia Yueting, 46, filed for Chapter 11 bankruptcy pursue opportunities in China
- Debt restructuring plan will allow the Faraday company to continue without Jia
- All of the entrepreneur’s shares in the electric car company are with creditors
Jia Yueting, pictured, is the founder of Faraday Future who filed for Chapter 11 bankruptcy today in Delaware
A Chinese electric car entrepreneur has filed for bankruptcy in the US in the hopes of satisfying the company’s debts in China.
Jia Yueting, 46, founder of electric car start-up Faraday Future and the LeEco streaming service, said he has already repaid $3 billion worth of debt with another $2 billion outstanding.
A statement from his team said that he filed for Chapter 11 bankruptcy on Sunday and will enter a debt restructuring plan. It is reported that Yueting had a personal debt of $3.6 billion.
The restructuring plan will allow Yueting, who is a Chinese national from Shanxi province, to reduce and renegotiate the company’s accounts so Faraday can continue operations.
A creditor trust has been established which will be managed by a committee of creditors and a trustee that will receive all of his equity interest and personal assets.
Jia, who owned 33 per cent of Faraday, has said that he will head back to China to pursue new opportunities in the hope of continuing the electric car project to rival Tesla.
All of his shares in Faraday have now been transferred to the creditor trust.
Jia Yueting, introduces LeSEE self-driving electric car at a press conference in Beijing. The businessman said he has already paid back $3 million in debt but still owes another $2 million
According to the Faraday website, the FF 91 is the company’s all-electric flagship model
Though Jia has declared himself bankrupt, the company has stressed that Faraday’s ‘normal business operations’ will not be affected.
Jia had hoped Faraday would follow close behind Tesla in the electric vehicle market in the US and China. The company has gradually drowned in debt since it began work in 2016.
Yin Ran, a Shanghai-based angel investor dealing in manufacturing, told the South China Morning Post: ‘If he still wants to keep his EV dream alive, he would need to prove that Faraday has the capability of building top-class cars soon.’
Initial targets for production of the FF91 SUV model were December 2018 but Faraday failed to meet its own timescale.
According to the Faraday website the FF91 is : ‘All-electric, autonomous-ready and seamlessly connected, it embodies our latest mobility advancements in performance, intelligence, and user experience.’