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LORDSTOWN -- General Motors, which invested in Lordstown Motors Corp. early to help the company purchase the Detroit automaker's Lordstown assembly plant, has sold its stake in the electric-vehicle startup.
GM sold the 7.5 million shares of common stock it held in a series of open-market transactions in the fourth quarter of 2021, according to GM spokesman Jim Cain. He did not disclose the net proceeds.
The automaker acquired the shares as part of a special purpose acquisition deal in October 2021 that made Lordstown Motors a publicly traded company through its merger with New York-based DiamondPeak Holdings Corp.
The shares had an equity value of $75 million initially. In exchange, GM gave Lordstown Motors $25 million cash and in-kind contributions that helped Lordstown Motors complete the purchase of the plant. GM's stake worked out to be about 5 percent.
"Our objective was to facilitate the purchase of the plant and send them on the road to production, so we accomplished that," Cain said Tuesday.
In addition to the $25 million put up by GM, the noncash investments included $20 million for the land, buildings and equipment and $30 million in operating expenses.
When the plant changed hands in November 2019, GM agreed to an open-ended mortgage agreement that let Lordstown Motors borrow up to $40 million from GM.
General Motors closed the plant in 2019.
On Monday, Lordstown Motors released underwhelming commercial production and sales projections through 2023. The limited production of the company's flagship vehicle, the all-electric Endurance truck, of 3,000 over this year and next coupled with news of continued financial losses and not yet consummating a deal with Foxconn to purchase the plant sent the company's shares tumbling.
The stock closed Monday down 20 percent but rebounded slightly Tuesday, ending trading up about 4.7 percent at $2.69 per share.
Foxconn and Lordstown Motors announced in November they had an agreement for the Taiwanese electronics and tech giant to buy the factory for $230 million. With that, Foxconn agreed to a $50 million equity investment that in a show of good faith, Foxconn made shortly after the principle agreement was made public in September.
The sides also agreed to pursue a contract manufacturing agreement for the Endurance and a joint venture agreement to co-design and develop vehicle programs based on Foxconn's Mobility in Harmony platform.
The contract manufacturing agreement is a condition of the factory sale being finalized while the development agreement is critical to raise $250 million more needed to launch the Endurance sometime in the third quarter of this year, company officials said on Monday's analyst call.
The development agreement and right funding structure would "greatly enhance our ability to raise the additional capital necessary to not only fund new vehicles, but to bring the Endurance into production in Q3. Clearly, we and Foxconn have more work to do," Lordstown Motors CEO Daniel Ninivaggi said.
The $250 million would include financing for hard tooling to produce the truck.