EV truck maker to get $400 million from hedge fund

By Terry Troy

Following what could only be described as a tumultuous six weeks, it looks like Lordstown Motors near Warren may not be dead after all. The company will be receiving an infusion of $400 million from a hedge fund managed by New Jersey-based Yorkville Advisors, which has agreed to buy that amount in shares over a three year period, according to a filing with the SEC this week.

If you’ll recall, Lordstown Motors is a would-be manufacturer of light duty fleet electric vehicles, specifically the Endurance pickup, which was scheduled to begin production this fall. The company was founded in 2019, when General Motors shuttered its famed Lordstown plant, which was used most recently to make the Chevrolet Cruze. The goal was to make Lordstown a premier manufacturer of EV commercial pickups and turn the Mahoning Valley into the epicenter of electric vehicle manufacturing at the historic 6.2 million square-foot Lordstown Assembly Plant.

The trouble at the company started five weeks ago after the company issued a warning that it might not have enough funds to bring the Endurance to market. Lordstown operations had come under increasing scrutiny after the company said it had no firm orders for its vehicle, just after saying it had enough to maintain production through 2022.

Naturally, there were management changes in the offing. In June, Lordstown announced several changes to its executive management team. Steve Burns resigned as CEO and from the Company’s board of directors. Chief Financial Officer Julio Rodriguez also resigned.

Lead Independent Director Angela Strand was named executive chairwoman of the company, overseeing the organization’s transition until a permanent CEO is found. Becky Roof is serving as Interim CFO.

Rich Schmidt will continue to oversee all day-to-day operations, including manufacturing and engineering. Mr. Schmidt was promoted to president in November having previously served as Lordstown’s chief production officer. He has over 30 years of automotive industry expertise, including experiences at Toyota and Nissan, Hyundai, Volkswagen, J.D. Power, and Tesla Motors.

Jane Ritson-Parsons, formerly Lordstown Motors’ Interim chief brand officer, has been appointed COO. She is a highly experienced senior global executive with demonstrated leadership and revenue building success with a successful track record most recently at Hasbro Inc as their Group Executive, Global Marketing.

This new agreement should allow Lordstown to continue by providing the much-needed capital required to produce its first electric vehicle. If approved by shareholders, the hedge fund, designated as YA II PN, will be able to purchase 35.1 million shares, or about 19.9% of outstanding shares. The hedge fund, which is able to buy the shares at $7.48 a share, could also benefit financially if the stock price rises.