Lordstown Motors (RIDE.O) said on Friday it plans to take legal action against investor Foxconn (2317.TW) to ensure that the Taiwanese contract manufacturer completes a planned purchase of nearly 10% of the electric vehicle startup’s shares.
The company, and its EV peers have been struggling as access to capital tightens from rising interest rates and economic uncertainty.
The cash-strapped EV maker had warned earlier it might be forced to file for bankruptcy, citing uncertainty over a $170 million investment deal with Foxconn through which the Taiwanese company would hold a near-20% stake in the money-losing U.S. firm.
It currently holds a little over 8% in the company, as per Refinitiv data.
Foxconn has since invested $52.7 million and is balking at purchasing additional shares, citing a breach of their agreement, Lordstown said.