American electric vehicle manufacturer Lucid Group declared that it had successfully raised $1.5 billion in equity on December 19, according to CNBC.
In hindsight, the company initially disclosed the offering in November when it released its third-quarter financial results.
How did it happen?
A private sale of over 86 million shares to a subsidiary of its biggest investor, the Public Investment Fund of Saudi Arabia, allowed Lucid to raise the majority of that fund worth around $915 million.
On the other hand, Lucid traded another 56 million shares in a conventional secondary stock offering to raise the necessary $600.
Purpose
As per the report, the significant founding round aimed to raise the Saudi Public Wealth Fund’s ownership of Lucid to its former level of around 62%.
Lucid aims to “further strengthen its balance sheet and liquidity position” with that enormous fund.
Notably, Lucid’s latest financial report indicates that it has around $3.85 billion in cash as of September 30.
This significant fund demonstrates that Lucid is not going bankrupt. Furthermore, it also shows how the Saudi PIF has increased its investment in Lucid, which signifies its confidence in the company. That said, both owners of Lucid Air and investors will benefit from this.
