Startup electric carmaker GreenTech Automotive has missed its first loan payment to the state of Mississippi for its assembly plant.
On June 30, GreenTech missed the first loan payment of $150,000 on its $3 million loan. Mississippi made the loan agreement with the company five years ago to generate good paying jobs at the Tunica, Miss.-based assembly plant.
Mississippi Development Authority spokesman Jeff Rent confirmed on Monday that GreenTech missed its first payment. “The Mississippi Development Authority continues to work with GreenTech Automotive as the company secures additional funding,” according to Rent. “This is the best course of action to protect the state’s investment and to keep Mississippians working at the plant.”
GreenTech’s efforts to bring in non-U.S. citizens as investors and workers may have caused some of the problem, or at least indicated the financial struggles the company has been facing. In May, the Roanoke Times reported that the U.S. Citizenship and Immigration Services had denied a green card request to the company. GreenTech had been planning on taking advantage of a federal provision that allows non-U.S. citizens to obtain a permanent green card if they invest $500,000 and create 10 jobs.
While GreenTech had promised it would have 350 employees working for the company, the federal Immigration and Nationalization Service (INS) found something different. INS discovered the automaker had only 75 people working for it last year, has produced only 25 cars, and has sold none of them.
Nicholas Colucci, chief of the immigrant investor program, signed a decision stating GreenTech had a “general lack of credibility from the failure to meet any projected timelines.”
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Under the loan agreement made in 2011, a default notice could be issued by the state to declare the loan due and payable immediately. That could lead to a seizure of all the company’s property and assets. Mississippi Development Authority spokesman Rent said he doesn’t know if GreenTech has been sent a notice.
Mississippi had also loaned Tunica County, where GreenTech is based, $1.9 million to buy the site for the electric carmaker. GreenTech has also been certified for state tax breaks exempting it from state income and franchise taxes for 10 years, and from sales taxes on equipment purchased by the company.
GreenTech has made other efforts to secure financial backers. In 2014, the company was able to raise $47 million in an equity round. The money raised was expected to be used to start production of the company’s MyCar two seat electric car as well as a larger sedan, the G2.