Electric car company Faraday Future will be listed through a merger with a SPAC (Special Purpose Acquisition Company) in a deal that will be announced as soon as Friday, Reuters said, citing two people familiar with the matter.

Chinese automaker Geely will act as an anchor investor, with the deal valuing Faraday Future at about $2.7 billion, the report said.

Faraday Future is an electric car company founded by Jia Yueting, an entrepreneur who in October 2019 filed for bankruptcy in the US after running up billions of dollars in personal debt.

Faraday Future has agreed to merge with Property Solutions Acquisition Corp, and Geely will provide $775 million in financing for the deal in the form of a private equity investment in shares of a publicly-traded company, the report said.

SPACs differ from traditional IPOs by setting up a shell company with only cash but no actual business or other assets to list on the U.S. stock market, and then finding companies with growth potential and quality business to achieve a reverse merger within a certain period of time.

This approach helps the target company to go public while at the same time realizing profits for the original investors of the SPAC company.

On Jan. 25, Reuters reported that Faraday Future plans to open a factory in China to produce some of its electric cars and has invited Geely to provide manufacturing services.

As part of the plan, Faraday Future plans to build a new base in China, the report said, adding that Faraday Future told prospective investors this month that it plans to place the plant in a first-tier Chinese city and that the initial phase will have an annual capacity of more than 100,000 vehicles.

Faraday Future said to file for US listing in two weeks at earliest

(Source: Faraday Future)