Kansas City-based Smith Electric Vehicles Corp. received a loan of $2.9 million from a Hong Kong investor that will keep the company open as it pursues additional investment. This loan will be converted to Smith Electric common stock on the closure of proposed subscription rights offering to existing shareholders.
The closing of the subscription rights offering would allow Smith Electric to continue its strategic goal of pursuing a U.S. listing, according to a Tanfield Group PLC release.
FDG Electric Vehicles Ltd. has agreed to support the proposed subscription rights offering, while Hong Kong-based FDG Electric Vehicles Ltd. has agreed to apply for any shortfall in the subscription rights offering to ensure that about $10 million is raised. The offering will be open for 30 days.
Smith Electric’s board stated the company needed to raise $4.5 million in early October to avoid bankruptcy or shutdown.