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Mullen Automotive Stock Climbs After Electric Last Mile Bankruptcy Deal

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A delivery vehicle manufactured by Electric Last Mile Solutions in South Bend, Ind.
Photo: ELMS/via REUTERS

Electric-vehicle startup
Mullen Automotive Inc.
shares climbed after the company said it gained court approval to buy an Indiana manufacturing plant and other assets from now-defunct
Electric Last Mile Solutions Inc.
for $92 million.

Mullen shares, down about 93% so far this year, rose 64% in Wednesday trading to 36 cents. Electric Last Mile put its assets up for sale after shutting its business and filing a bankruptcy liquidation case in June.

The $92 million deal price includes Electric Last Mile Solutions’ manufacturing plant in Mishawaka, Ind., and its inventory and intellectual property. Mullen is paying $55 million in cash and assuming roughly $37 million in contractual liabilities, court records and securities filings show.

Electric Last Mile listed debt obligations of between $50 million and $100 million in its chapter 7 petition, though that didn’t account for the cost of winding down the company’s business and administering claims against the bankruptcy estate.

Mullen said it expects to pay all cash under the deal, which Chief Executive

David Michery
said would shorten the company’s path to production.

Last month, Mullen said it bought a 60% stake in another EV truck startup, Bollinger Motors, for $148.2 million in cash and stock. Mullen said the addition of the Indiana manufacturing plant gives it the ability to integrate Bollinger’s vehicle platforms with Mullen’s into an already existing and capable high-volume facility. That will accelerate the launch of Bollinger’s retail vehicles by at least a year, the company said. Mullen also said it plans to begin production of one of its EV crossovers at the Indiana plant in 2024.

Electric Last Mile filed bankruptcy following its disclosure earlier this year of an investigation by the Securities and Exchange Commission in connection with auditor BDO USA and its dual roles in both auditing the company’s business and helping its executives make share purchases.

An internal probe by Electric Last Mile led to the February resignations of ELMS’s chief executive and executive chairman. BDO has denied that it helped to create and structure the share transactions.

The probe “made it extremely challenging to secure a new auditor and attract additional funding,” Electric Last Mile said in court papers in June.

The bankruptcy filing marked an abrupt downfall for a company that last year said it had made initial deliveries of commercial electric vehicles in the U.S., had generated revenue for the first time and had acquired the Indiana facility to expand production.

Electric Last Mile went public last year by merging with a blank-check firm known as a special-purpose acquisition company. Other electric-vehicle makers that have raised money through SPACs, including
Nikola Corp.
and
Lordstown Motors Corp.
have also faced scrutiny from the SEC.

Write to Will Feuer at Will.Feuer@wsj.com and Andrew Scurria at Andrew.Scurria@wsj.com

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