Lucid Raises $3 Billion from Saudi Shareholder

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Lucid Group announced on May 31 that it was raising about $3 billion through a new stock offering, nearly two-thirds of which came from the Saudi investment fund that controls the electric vehicle startup.

Lucid said about $1.8 billion of the total will come from a private placement of shares with Saudi Arabia’s Public Investment Fund (PIF), which owns about 60.5% of Lucid. PIF participation will remain at the same level after the new funding cycle.

Specifically, PIF subsidiary Ayar Third Investment Company has agreed to purchase 265.7 million shares of common stock from Lucid in a private placement expected to close on June 26, 2023.

The transaction implies a price of approximately $6.80 per Lucid share, up from $7.76 as of the May 31 close. Following the announcement, shares of the luxury electric vehicle maker fell 9% after the market opened.

Lucid builds an electric vehicle factory in Saudi Arabia, the Arab country’s government having ordered 100,000 vehicles from the startup.

The remaining $1.2 billion will be raised through a public offering of new shares: 173.5 million. which began on May 31, the company said. The public offering is expected to close on or around June 5, 2023.

Lucid Group said it would use the new cash for “general corporate purposes,” including capital expenditures and working capital, among other things.

According to its latest financial report, released on May 9, Lucid had approximately $3.4 billion in liquidity and approximately $700 million in available credit lines as of March 31. Lucid CFO Sherry House said this amount is enough to fund the company at least through the second quarter of 2024.

The $3 billion raised is critical for Lucid, which is battling mounting losses and dwindling cash reserves amid recession fears and a price war sparked by Tesla.

Last month, Lucid reduced its 2023 production forecast to “more than 10,000 vehicles,” down from a previous estimate of 10,000 to 14,000 vehicles. The company reported a net loss of $780 million in the first quarter and lower-than-expected revenue of nearly $150 million.

The EV maker plans to unveil its second vehicle, the Gravity SUV, later this year, and start taking reservations. Production of the three-row SUV is expected to begin in 2024, CEO Peter Rawlinson said last month during the first quarter 2023 earnings conference call.

 

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