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The news that Jia Yueting, the founder of FF, voluntarily applied for personal bankruptcy reorganization was confirmed that according to the plan, all FF shares and related income rights held by Jia Yueting were formally transferred to the creditor trust, which will be controlled and managed by the creditor committee and the trust trustee.

In addition, the debt handling team told the media that so far, Jia Yueting has repaid more than 3 billion US dollars in debt, and the total outstanding debt is about 3.6 billion US dollars. If you subtract the secured debt that has been frozen for disposal of domestic assets and convertible shares, Jia Yueting's remaining net debt is about 2 billion US dollars.

On October 14th, FaradayFuture issued a statement on the personal bankruptcy reorganization of Mr. Jia Yueting, the founder of FF, and the establishment of a creditor trust, formally announced Jia Yueting's personal bankruptcy reorganization plan, and said that it would help FF to complete its equity financing and IPO goals as soon as possible.

Original statement:

In order to thoroughly solve the personal domestic debt problem, Mr. Jia Yueting, founder and CPUO of Faraday Future, has filed for personal bankruptcy reorganization (Chapter 11) in the United States, and has established a creditor trust controlled and managed by the creditor committee and the trust trustee. Upon completion of the plan, Mr. Jia Yueting will transfer all his equity in Smart King Limited (Faraday Future Global holding Company) to the creditor trust fund. To better protect the interests of creditors and repay debts.

This solution will not affect the daily operation of FF, and will bring multiple benefits to FF:

Mr. Jia Yueting's personal debt problem is expected to be solved here, which will be a major benefit for FF to complete its equity financing and IPO goals as soon as possible, and the Sino-US dual home strategy implemented by FF will also be better implemented and promoted.

Mr. Jia Yueting will continue to lead the FF team as founder and CPUO of the company and perform relevant duties to achieve strategic objectives, maximize the value of FF equity assets and creditor trust assets, and benefit all stakeholders.

This restructuring will not affect the ownership of FF shares acquired after the exercise of employee stock options or employee stock options, and FF will continue to attract elite talents through the employee stock ownership program.

Faraday Future

October 14, 2019

Attached: statement on Mr. Jia Yueting's personal bankruptcy reorganization and the establishment of a creditor trust

In order to fulfill his commitment to the creditors to the end, to solve the personal debt problem better and faster, so that every creditor can have an equal opportunity to repay the debt, Mr. Jia Yueting voluntarily filed for personal bankruptcy reorganization (Chapter 11) in the United States on October 13. (under the plan, a creditor trust will be established at the same time and all U.S. assets will be transferred to creditors when the conditions are met. Upon completion of the scheme, Mr. Jia Yueting will no longer hold any equity interest in Smart King, Faraday's future holding parent company (hereinafter collectively referred to as FF). Combined with the completed partnership system, this program will lay a solid foundation for the success of FF and become a great company, thus accelerating the process of maximizing the value of FF equity assets that make up the creditor's trust assets, and thoroughly solve Mr. Jia Yueting's direct, personal guarantee and indirect debt problems.

The following is a brief introduction to the scheme:

1. According to the plan, after the ban of the British Virgin Court is lifted, Mr. Jia Yueting will formally transfer all personal assets recognized by the American court, that is, all FF shares and related income rights held by individuals, to the creditor trust; the trust is controlled and managed by the creditor committee and the trust trustee, which is the best solution for Mr. Jia Yueting to solve the personal debt problem and maximize the interests of creditors.

two。 This plan gives creditors triple protection. First, the creditors still reserve the right to dispose of all the frozen Chinese assets of Mr. Jia Yueting and other direct debtors; second, the original debtors and guarantors except Mr. Jia Yueting continue to perform their debt repayment obligations. Third, compared with the previous right to claim repayment from Mr. Jia Yueting, the guarantor, under this scheme, all creditors have the legal right to participate in the disposal of Mr. Jia Yueting's assets through the creditor trust and obtain the relevant income, which is equivalent to a strong guarantee of debt service at the legal level.

3. At the same time, the scheme also allows creditors to avoid three major risks. First, Mr. Jia Yueting chose the more difficult personal bankruptcy reorganization (Chapter 11) plan, abandoning the simple, low-cost and directly exempt personal bankruptcy liquidation (Chapter 7). Compared with Chapter 7, Chapter 11 is more likely to make creditors more repaid, thus reducing the risk that creditors can only get a small part of their debts. Second, the program will also prevent individual creditors from maliciously freezing and auctioning Mr. Jia Yueting's personal assets at low prices, resulting in creditors as a whole to get less repayment. Reduce the time cost, capital cost and uncertainty risk for creditors to exercise their claims in other ways.

4. More than 90% of Mr. Jia Yueting's debts are guaranteed for the company. Since being over-frozen by a creditor (far more than the total debt owed), all the assets and bank operating accounts of Jia Yueting and Letv have directly led to the normal operation of the company. Until the collapse of Letv, Mr. Jia Yueting has repaid more than $3 billion in debt for the company so far, and the total debt to be repaid is about $3.6 billion. Minus the secured debt that has frozen domestic assets to be disposed of and convertible, the net debt is about $2 billion.

5. After Mr. Jia Yueting's personally guaranteed debt is repaid, the debts of the actual borrower and the co-guarantor will be transferred to the new creditor Mr. Jia Yueting and shall be repaid to Mr. Jia Yueting. In the next step, the Jia Yueting personal debt repayment team will sign a repayment agreement to Mr. Jia Yueting with the relevant borrowers and co-guarantors, and look forward to the cooperation and support of all parties.

6. After the completion of the personal bankruptcy reorganization plan, Mr. Jia Yueting transferred all the shares and related income rights held by the individual to the creditors, and the personal guarantee obligations and debts were relieved, so that he could return to China to promote and implement the dual home strategy of FF, which is of great benefit to the successful financing of FF and the future IPO, especially to the rapid development of FF's business in China.

7. Mr. Jia Yueting gave up all FF shares and related income rights in order to completely pay off the debt and turn FF into a great company. The reform of FF partnership system promoted by Mr. Jia Yueting has been completed, which has laid the foundation of advanced corporate governance structure for FF to become a great company, and continuously attracts elites from all over the world to start businesses together through the partnership mechanism. Mr. Jia Yueting, as the founder and CPUO of FF, will continue to promote the FF team to achieve the set strategic objectives and maximize the value of FF equity assets and creditors' trust assets, so as to enable all creditors to achieve their debt repayment goals through the appreciation of trust assets.

8. The creditor vote is only to establish Jia Yueting's personal bankruptcy restructuring plan rather than the specific amount of debt, which will be finally reviewed and confirmed by the US court.

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