The Clap
Lucid Motors, the electric car manufacturer, has signed a deal to receive one billion dollars from one of the Public Investment Fund’s companies.
Details
Ayar Third Investment Company, a subsidiary of the Saudi sovereign wealth fund, will purchase convertible preferred shares worth one billion dollars.
The “luxury electric car maker” will be able to convert those shares into approximately 280 million shares, according to a notification to the US Securities and Exchange Commission.
So What
Lucid, which is facing weaker-than-expected demand, intends to use the net proceeds from the private placement to enhance its capital spending for other purposes.
It is worth mentioning that it is one of the many start-ups in the severely affected electric car sector, due to slowing demand growth.
In addition to the price war ignited by the giant Tesla.
Some Context
The Public Investment Fund invested in Lucid for the first time in 2018.
It is currently the “largest shareholder” in the company with a stake of approximately 60%, according to Bloomberg.
In May of last year, the American manufacturer raised 3 billion dollars through a regular share offering and investment by the Saudi sovereign wealth fund.
Lucid opened the “first car manufacturing facility” in Saudi Arabia in September of the previous year at an assembly plant near Jeddah.
This comes as part of a strategy to diversify the kingdom’s economy and reduce dependence on oil revenues.
