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Mortgage filed for EV plant

LORDSTOWN — The Taiwanese electronics giant buying Lordstown Motors Corp.’s electric-vehicle manufacturing plant has an open-ended mortgage on the factory for more than twice the amount of the agreed purchase price.

But it’s rather a common practice to exceed the purchase price, and under Ohio law, when recording this type of mortgage, a maximum dollar amount is required, said a spokeswoman with the automaker.

“This amount typically exceeds the amount of potential liabilities that would be secured by the mortgage,” said Kimberly Spell with Lordstown Motors.

Filed with the Trumbull County Recorder’s Office, a mortgage document shows Foxconn EV Technology Inc. took out a $500 million open-ended mortgage for properties at 2300 Hallock Young Road and at 2369 Ellsworth Bailey Road

The 2300 Hallock Young Road address is the massive assembly complex. The address at 2369 Ellsworth Bailey Road appears to be the metal center at the plant when it was owned by General Motors.

The mortgage was recorded Nov. 24.

Two weeks before, Lordstown Motors and Foxconn, also known as Hon Hai Precision Industry, announced a definitive asset purchase agreement for the 6.2 million-square-foot automaking plant for $230 million.

The purchase agreement called for Foxconn by Nov. 18 to make a $100 million down payment, which was made, according to Spell. Also, Foxconn agreed to payments of $50 million Feb. 1 and by no later than April 15, subject to certain conditions. The remaining balance, along with reimbursement of certain operating and facility costs incurred from Sept. 1 through closing, will be paid at closing, which is targeted for April 30.

“In exchange for the down payments, LMC granted Foxconn the mortgage,” Spell said.

Foxconn already has made an equity investment of $50 million into Lordstown Motors.

Also, the companies have agreed to pursue a contract manufacturing agreement for the Endurance battery-powered truck — the flagship vehicle for Lordstown Motors — that must be signed before closing and to pursue a joint venture agreement to co-design and develop vehicle programs for the global commercial fleet market.

Also in November, the company announced it will delay commercial production and customer delivery of the Endurance until the third quarter of 2022 due to obstacles that pushed back assembly of preproduction vehicles needed for validation and whole-vehicle approval.

The previous market delivery target date, the company said in August, was for the second quarter of next year.

The company expects to build about 100 preproduction Endurances over the next three months, a delay brought on because of parts shortages and other supply-chain disruptions.

Lordstown Motors stock, traded on the Nasdaq exchange under the RIDE ticker, closed trading Tuesday at $4.29 per share, up nearly 6 percent from Monday. On Friday, shares closed at a 52-week low of $3.58 per share.

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