Cash-strapped EV maker Lucid Motors plans $1.67 bn offering amid loss warnings

  • Lucid Motors plans a public offering and private placement of 637 million shares to raise $1.67 billion amid financial struggles.
Lucid
Lucid stock sale combined with its latest warning of a bigger-than-expected Q3 loss has sent shares down by as much as 16.5 per cent. | FILE PHOTO: A Lucid Air Dream Edition electric vehicle is seen here at the Geneva Motor Show held in Doha, Qatar. (Bloomberg)
Lucid
Lucid stock sale combined with its latest warning of a bigger-than-expected Q3 loss has sent shares down by as much as 16.5 per cent. | FILE PHOTO: A Lucid Air Dream Edition electric vehicle is seen here at the Geneva Motor Show held in Doha, Qatar.

Cash-strapped electric luxury sedan maker Lucid said on Thursday a combined public offering and private placement of roughly 637 million shares would likely fetch it $1.67 billion.

The stock sale as well as its latest warning of a bigger-than-expected loss for the third quarter sent Lucid shares down as much as 16.5% to $2.74, the lowest since July 2.

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The company expects to report a loss from operations of $765 million to $790 million for the quarter ended Sept. 30, compared with expectations of $751.7 million, according to data compiled by LSEG.

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Besides a public offering of more than 262 million shares, Lucid signed up Ayar Third Investment, an affiliate of Saudi Arabia's Public Investment Fund and its biggest shareholder, to sell nearly 375 million shares in a private placement.

Ayar expects to maintain its ownership of about 59% of the company's outstanding shares, Lucid said.

"While the offering helps boost liquidity, the fact it resorted to issuing equity after such a precipitous decline for the stock over the past several quarters is a major red flag," said Garrett Nelson, vice president and senior equity analyst at CFRA Research.

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The sovereign wealth fund's affiliate committed an additional $1.5 billion in August, which Lucid had initially expected to provide sufficient liquidity until the fourth quarter of next year.

Lucid had about $1.35 billion in cash and cash equivalents at the end of the second quarter.

It intends to use proceeds from the stock sale and private placement for general corporate purposes, capital expenditure and working capital.

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First Published Date: 18 Oct 2024, 09:40 AM IST
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