Lucid Group secures funds from Saudi investor By Investing.com

Lucid Group, Inc. (NASDAQ:), a manufacturer of electric vehicles, has entered into a significant financial agreement with Ayar Third Investment Company, an affiliate of Saudi Arabia’s Public Investment Fund and Lucid’s majority shareholder.

The company disclosed the completion of a private placement deal that resulted in the sale of 75,000 shares of its Series B Convertible Preferred Stock to Ayar for $750 million.

The transaction is part of a subscription agreement initially announced on August 4, 2024. The shares were issued under a Certificate of Designations filed with the Delaware Secretary of State on the same day as the closing and were sold in reliance on an exemption from registration under the Securities Act.

In conjunction with the sale, Lucid Group also amended its Investor Rights Agreement, granting Ayar registration rights, which include piggy-back and shelf registration rights for the Convertible Preferred Stock and the Common Stock issuable upon its conversion.

Lucid’s deal with Ayar represents a significant infusion of capital for the electric vehicle maker, as the industry continues to expand and compete with traditional automotive companies.

This financial move comes at a pivotal time for Lucid Group, which has been ramping up production and expanding its market presence amidst increasing demand for electric vehicles.

The details of the agreement, including the Certificate of Designations and the Fourth Amendment to the Investor Rights Agreement, were outlined in the exhibits attached to the Current Report on Form 8-K filed with the SEC, based on which this article is reported.

Lucid Group has been making significant strides in the electric vehicle market. The firm’s Q2 earnings report highlighted robust growth, with revenue reaching $200.6 million, a 32.9% increase year-over-year. Vehicle production and deliveries also saw an impressive increase, with 2,394 vehicles delivered, marking a 70.5% rise compared to the same period last year.

Stifel, an independent analyst firm, raised its price target for Lucid Group following these results, while maintaining a hold rating on the stock. This decision was influenced by the company’s strong Q2 revenue, which exceeded expectations by 20.2%, and the securing of $1.5 billion in additional funding from Saudi Arabia’s Public Investment Fund.

Lucid Group plans to increase its research and development expenses in the latter half of the year, with a strategic expansion of their studio and service center footprint.

These recent developments indicate Lucid Group’s commitment to growth and profitability in the electric vehicle market, backed by strong financial performance and strategic investments.

However, analysts caution that timing for profitability remains uncertain, underscoring the need for careful execution of the company’s plans.

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