Investment drive: A Lucid Air electric car on display at a trade show, in Las Vegas. PIF is purchasing US$1.8bil (RM8.3bil) of the stock in a private placement. — Reuters
NEW YORK: Lucid Group Inc is raising about US$3bil (RM13.8bil) in a common stock offering with the majority of the money coming from the electric vehicle (EV) maker’s Saudi owners after a more than 60% stock slump in the last year.
The shares plunged more than 7% in extended trading.
The company announced the raise along with a corresponding investment by its owners – Saudi Arabia’s Public Investment Fund (PIF) – in a statement, confirming an earlier Bloomberg News report.
PIF, the kingdom’s largest sovereign wealth fund, is purchasing US$1.8bil (RM8.3bil) of the stock in a private placement.
The fund already owns about 60% of Newark, California-based Lucid, according to data compiled by Bloomberg.
Bank of America Corp is acting as the sole book-running manager for the public offering.
“Lucid intends to use the net proceeds from the public offering, as well as from the private placement by its majority stockholder, for general corporate purposes,” the company said.
PIF first invested in Lucid in 2018, and steadily accumulated more shares until it held a majority ownership when the startup went public in 2021 through a combination with a special purpose acquisition company.
The EV maker’s market value temporarily catapulted above established rivals Ford Motor Co and General Motors Co that year, and the shares jumped in January this year amid expectation of a buyout by PIF.
Bloomberg Intelligence Joel Levington said the offering “at least temporarily undermines hope for a full privatisation of the company.
The additional funds may help solve financial flexibility issues in the near term, but Lucid may need additional support in 2024.”
The Saudi bet on Lucid includes plans to build an EV factory in the country.
The kingdom is working toward rolling out hundreds of thousands of cars a year as it looks to become a hub for automakers.
It’s a priority for Saudi Arabia, which is trying to diversify its economy away from oil.
Its target of making some 300,000 cars by the end of the decade relies on Lucid for half of that production.
Lucid has stumbled recently as it grapples with heavy costs, production challenges and competition in the EV market.
The company said in March that it would eliminate about 18% of its workforce.
This month it guided toward the low end of its annual production plan following a slow start the year.
The company has been trying to break out from a crowd of would-be Tesla Inc competitors and firmly establish itself in the EV market.
Its market capitalisation had briefly eclipsed US$90bil (RM415.3bil) during the market frenzy in 2021 and has since fallen to about US$14bil (RM65bil). — Bloomberg
