Lucid said the Saudi Public Investment Fund, which owns more than 60% of the company, has agreed to buy 265.7 million shares in a private placement for around $1.8 billion. , implying a Lucid stock price of around $6.80, compared to Wednesday’s closing price of 7.76. dollar.
The rest of the amount will come from a public offering of 173.5 million common shares.
The extra cash is significant and comes as the automaker, like others, grapples with mounting losses and dwindling cash reserves amid recession fears and a leader-led price war of the Tesla market.
“The secondary offering is likely to be suitable because there are a lot of ESG dollars looking for investment,” said Louis Navellier, chief investment officer of fund management firm Navillier, which has entered the vehicle sector. utilities and related investments but moved away from Lucid.
“This, along with the Saudi money, will keep Lucid alive for a few more years. prices and offering discounts,” he added.
Lucid’s cash and cash equivalents (current liabilities “against temporarily frozen cash that is readily convertible into a specified amount of cash”) fell to $900 million at the end of the first quarter, from 1.74 billion in the previous quarter.
Chief Financial Officer Sherry House said the company has about $4.1 billion in cash, enough to fund the luxury electric car company for at least the second quarter of next year.
The luxury sedan maker cut its 2023 production forecast this month and reported lower-than-expected first-quarter revenue, which CEO Peter Rawlinson attributed to rising interest rates as a challenge for the market.
Despite Lucid’s struggles, the Saudi Public Investment Fund, led by Crown Prince Mohammed bin Salman, has been a loyal investor in the automaker, with a stake of around $9 billion.
The California-based company is building its first overseas production plant in the kingdom, and the Saudi government has agreed to buy up to 100,000 Lucid vehicles over the next ten years.
On Wednesday, the company, which is expected to unveil its Gravity SUV later this year ahead of its 2024 launch, said it plans to use net proceeds from its offering for general purposes, including capital expenditures and the fund. rolling.
Bank of America will act as bookrunner for the public offering and Lucid intends to use the net proceeds of the public offering and private placement for general corporate purposes.
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