LCID
Lucid Group, INC
NASDAQ
8-K: Lucid Group Secures $1 Billion Investment from Saudi Arabia's PIF Affiliate
Sentiment:
8-K Filing
29 March 2024 5:08 PM
Lucid Group has finalized a $1 billion private placement with Ayar Third Investment Company, an affiliate of Saudi Arabia's Public Investment Fund, through the sale of Series A Convertible Preferred Stock.
Capital raise
Lucid Group has raised $1 billion through the sale of Series A Convertible Preferred Stock to Ayar Third Investment Company.
The capital raise is a private placement, not a public offering.
Summary
- Lucid Group has entered into a subscription agreement with Ayar Third Investment Company, an affiliate of the Public Investment Fund of Saudi Arabia.
- Ayar purchased 100,000 shares of Series A Convertible Preferred Stock for $1 billion in a private placement.
- The shares were issued under a Certificate of Designations filed on March 28, 2024.
- Lucid also amended its Investor Rights Agreement with Ayar, granting them certain registration rights for the preferred stock and common stock upon conversion.
- The amendment includes piggy-back and shelf registration rights for Ayar.
- The Series A Convertible Preferred Stock has a par value of $0.0001 per share.
- The initial conversion price is $3.5952 per share of common stock.
- The preferred stock accrues cumulative dividends at an annual rate of 9%, compounding quarterly.
- The minimum price for conversion is $2.77, subject to adjustments.
- The voting power of the preferred stock is capped at a certain level based on the initial value and minimum price.
- The agreement includes provisions for mandatory conversion, fundamental change repurchase, and optional redemption of the preferred stock.
Sentiment
Score: 8
Explanation: The document reflects a positive development for Lucid, securing a large investment from a strategic partner. The terms of the agreement are generally favorable, and the investment should provide the company with additional resources to execute its business plan. However, there are some risks and costs associated with the preferred stock.
Positives
- Lucid secured a significant $1 billion investment, strengthening its financial position.
- The investment comes from a major strategic partner, the Saudi Public Investment Fund.
- The preferred stock has a fixed dividend rate of 9%, providing a predictable return for the investor.
- The conversion feature allows the investor to potentially benefit from future increases in the common stock price.
- The agreement includes registration rights, providing liquidity options for the investor.
- The mandatory conversion clause could lead to a simplified capital structure in the future.
Negatives
- The preferred stock has a 9% dividend rate, which could be a cost to Lucid if not converted.
- The conversion price of $3.5952 is above the current share price, which may delay conversion.
- The voting power of the preferred stock is capped, which may limit the investor's influence.
- The mandatory conversion is triggered only if the stock price reaches 200% of the conversion price, which may not occur.
Risks
- The conversion of the preferred stock is subject to a beneficial ownership limitation, which could delay or prevent full conversion.
- The mandatory conversion is dependent on the common stock price reaching a certain threshold, which may not be achieved.
- The company may face challenges in meeting the liquidity conditions required for mandatory conversion or redemption.
- The company's ability to repurchase or redeem the preferred stock is subject to certain conditions, including the availability of funds and compliance with credit agreements.
- The company may need to obtain shareholder approval to issue more shares of common stock upon conversion if the conversion share cap is reached.
Future Outlook
The document outlines the terms of the investment and the rights of the investor, including potential conversion to common stock, repurchase options, and redemption rights. The company is required to file a shelf registration statement for the resale of the shares.
Management Comments
- The document includes a signature from Gagan Dhingra, Interim Chief Financial Officer of Lucid Group, Inc.
Industry Context
This investment is a significant capital infusion for Lucid, a company in the competitive electric vehicle market. The involvement of Saudi Arabia's PIF highlights the growing interest of sovereign wealth funds in the EV sector. This deal could be seen as a positive signal for Lucid's long-term prospects.
Comparison to Industry Standards
- The terms of the preferred stock, including the 9% dividend rate and conversion features, are fairly standard for private placements of this type.
- The shelf registration rights granted to Ayar are also common in such agreements, allowing the investor to sell their shares in the future.
- The mandatory conversion clause, triggered by a specific stock price performance, is a mechanism to align the investor's interests with the company's success.
- The voting cap is a common mechanism to prevent a single investor from gaining too much control.
- Compared to other EV companies, this investment provides Lucid with a substantial financial boost, similar to other capital raises in the sector, such as Rivian's IPO or Fisker's various funding rounds.
Stakeholder Impact
- Shareholders: The investment is likely to be viewed positively by shareholders as it strengthens the company's financial position.
- Employees: The investment provides financial stability and may support future growth and job security.
- Customers: The investment may lead to improved product development and customer service.
- Suppliers: The investment may lead to increased orders and more stable relationships.
- Creditors: The investment improves the company's creditworthiness and ability to repay debts.
Next Steps
- Lucid will need to file a shelf registration statement for the resale of the shares by Ayar.
- The company will need to monitor the common stock price to determine if the mandatory conversion clause is triggered.
- Lucid will need to manage the dividend payments on the preferred stock until conversion or redemption.
Related Party Transactions
- The transaction is with Ayar Third Investment Company, an affiliate of the Public Investment Fund, which is a majority shareholder of Lucid Group.
Key Dates
- February 22, 2021: Date of the original Investor Rights Agreement.
- March 24, 2024: Date Lucid entered into the subscription agreement with Ayar.
- March 28, 2024: Date the Certificate of Designations for the Series A Convertible Preferred Stock was filed.
- March 29, 2024: Closing date of the private placement and effective date of the Third IRA Amendment.
- June 30, 2024: First Dividend Payment Date.
Keywords
Lucid Group, Series A Convertible Preferred Stock, Ayar Third Investment Company, Public Investment Fund, Private Placement, Investor Rights Agreement, Convertible Stock, Capital Raise, Saudi Arabia, Registration Rights
LCID
Lucid Group, INC
NASDAQ
Sector: TBD
Filings with Classifications
Capital raise
17 July 2025 8:38 AM
Strategic Partnership Announcement
- Lucid and SMB Holding Corporation (a subsidiary of Uber) entered into a Subscription Agreement for a private placement.
- SMB Holding Corporation agreed to purchase Lucid Class A common stock equal to $300 million in cash.
- The purchase price per share is the arithmetic average of the daily volume-weighted average price of Lucid's common stock over 30 consecutive trading days ending prior to the VPA execution.
- The private placement is expected to close in Q3 2025, subject to regulatory approvals and customary closing conditions.
- Proceeds will fund non-recurring engineering costs for the Lucid Gravity Plus vehicles and general corporate purposes.
- SMB Holding Corporation may not transfer the shares for 18 months after closing.
Better than expected
17 July 2025 8:38 AM
Strategic Partnership Announcement
- Lucid secured a minimum order of 20,000 vehicles, providing a substantial revenue pipeline.
- A $300 million private placement from Uber's subsidiary provides capital and validates the partnership.
- The strategic partnership with Uber and Nuro positions Lucid at the forefront of the autonomous robotaxi market.
Capital raise
6 June 2025 4:07 PM
Annual Meeting Results
- The Amended and Restated 2021 Stock Incentive Plan was approved, increasing the number of shares of Class A common stock available for issuance by 184,000,000 shares. While primarily for compensation, this represents a potential future issuance of equity that could dilute existing shareholders.
Worse than expected
6 May 2025 4:09 PM
Quarterly Report
- The company's net loss, while improved year-over-year, still indicates that the company is not profitable.
- The company's gross margin is still negative, indicating that the company is selling vehicles at a loss.
Worse than expected
6 May 2025 4:08 PM
Earnings Release
- The company reported a GAAP net loss per share of $(0.24) for Q1 2025.
Capital raise
10 April 2025 9:54 PM
Beneficial Ownership Update
- Lucid Group, Inc. priced an offering of $1,100,000,000 aggregate principal amount of 5.00% convertible senior notes due 2030.
- The settlement of the issuance of these notes occurred on April 8, 2025.
- Ayar Third Investment Company entered into a privately negotiated prepaid forward share purchase transaction for $430,000,000.80 in connection with the notes offering, which is intended to facilitate hedging by investors in the notes.
Capital raise
8 April 2025 8:05 PM
Pricing Announcement
- Lucid Group completed a private offering of $1.1 billion in 5.00% Convertible Senior Notes due 2030.
- The notes were offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933.
- The initial purchasers had an option to purchase an additional $100 million in notes, which they exercised in full.
- Ayar Third Investment Company entered into a prepaid forward transaction to purchase approximately $430.0 million of Lucid's common stock.
Capital raise
2 April 2025 4:22 PM
Capital Raise Announcement
- Lucid is commencing a private offering of $1,000,000,000 aggregate principal amount of its Convertible Senior Notes due 2030.
- The initial purchasers of the notes will have an option to purchase up to an additional $100,000,000 aggregate principal amount of the notes.
- The notes will be offered only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act.
Delay expected
25 February 2025 4:12 PM
Annual Results
- The Midsize platform is currently in development, and is scheduled for start of production in late 2026.
Worse than expected
25 February 2025 4:12 PM
Annual Results
- The company reported a net loss of $2.7 billion for the year ended December 31, 2024.
- The company expects to continue to incur substantial losses and increasing expenses in the foreseeable future.
Capital raise
25 February 2025 4:12 PM
Annual Results
- The company will require additional capital to support business growth, and this capital might not be available on commercially reasonable terms, or at all.
- The company is pursuing additional financing through equity, equity-linked, or debt financing in the future.
Worse than expected
25 February 2025 4:09 PM
Earnings Release
- Lucid reported a GAAP net loss per share of $(1.25) for the full year 2024, indicating continued losses despite increased production and deliveries.
Capital raise
7 November 2024 4:10 PM
Quarterly Report
- Lucid completed a public offering and private placement in October 2024, raising approximately $1.7 billion in gross proceeds.
- The company issued 100,000 shares of Series A Redeemable Convertible Preferred Stock to Ayar for $1.0 billion in March 2024.
- The company issued 75,000 shares of Series B Redeemable Convertible Preferred Stock to Ayar for $750 million in August 2024.
Worse than expected
7 November 2024 4:10 PM
Quarterly Report
- The company's net loss of $992.5 million in Q3 2024 and $2.3 billion for the nine months ended September 30, 2024, is worse than expected, despite a 45% increase in revenue.
Worse than expected
7 November 2024 4:07 PM
Quarterly Report
- The company reported a significant net loss, indicating that it is not yet profitable.
- The cost of revenue is still significantly higher than the revenue, indicating that the company is not yet efficient in its production.
Capital raise
7 November 2024 4:07 PM
Quarterly Report
- Lucid completed a capital raise of approximately $1.75 billion in October 2024.
- The capital raise is intended to extend the company's financial runway well into 2026.
- The Public Investment Fund and other institutional investors participated in the capital raise.
Capital raise
4 November 2024 6:00 AM
SEC Form 4
- Lucid Group completed an underwritten public offering of 262,446,931 shares of its Class A common stock for aggregate gross proceeds of approximately $680 million.
- Ayar Third Investment Company purchased 374,717,927 shares of Issuer Class A common stock in a private placement for an aggregate purchase price of approximately $971 million.
- Ayar purchased from the Issuer an additional 21,470,459 shares of Common Stock for aggregate purchase price of approximately $56 million in a private placement.
Capital raise
18 October 2024 6:09 AM
Capital Raise Announcement
- Lucid Group is raising approximately $1.65 billion through a combination of a public offering and a private placement.
- The private placement with Ayar Third Investment Company will generate approximately $971 million.
- The public offering is expected to generate approximately $680 million.
- Ayar will purchase additional shares to maintain its ownership percentage.
Worse than expected
16 October 2024 4:42 PM
Capital Raise Announcement and Preliminary Results
- The estimated loss from operations of $765 million to $790 million is significant and indicates that the company is not yet profitable.
Capital raise
16 October 2024 4:42 PM
Capital Raise Announcement and Preliminary Results
- Lucid is conducting a public offering of 262,446,931 shares of its common stock.
- Ayar Third Investment Company intends to purchase 374,717,927 shares in a private placement concurrently with the public offering.
- The underwriter has a 30-day option to purchase up to 39,367,040 additional shares.
- Ayar intends to purchase additional shares if the underwriter exercises its option to maintain its ownership stake.
Better than expected
10 September 2024 9:05 AM
Technology and Manufacturing Day Presentation
- Lucid has already delivered more cars in 2024 than in all of 2023, indicating better than expected production and delivery numbers.
Capital raise
19 August 2024 9:04 AM
Private Placement Announcement
- Lucid Group has raised $750 million through the sale of Series B Convertible Preferred Stock to Ayar Third Investment Company.
- The shares were sold in a private placement.
- The company may need to raise additional capital in the future to fund its operations and growth.
Worse than expected
5 August 2024 4:10 PM
Quarterly Report
- The company's net loss of $643.4 million for the quarter and $1.324 billion for the six months ended June 30, 2024, is worse than expected.
- The company's accumulated deficit of $11.5 billion as of June 30, 2024, is worse than expected.
Capital raise
5 August 2024 4:10 PM
Quarterly Report
- Lucid issued 100,000 shares of Series A redeemable convertible preferred stock to Ayar for $1.0 billion in gross proceeds.
- The company entered into a $750 million five-year unsecured delayed draw term loan credit facility with Ayar on August 4, 2024.
- Lucid also entered into a subscription agreement with Ayar on August 4, 2024, for the purchase of 75,000 shares of Series B convertible preferred stock for $750 million.
Capital raise
5 August 2024 4:08 PM
Quarterly Report
- Lucid announced a commitment of $1.5 billion from an affiliate of the Public Investment Fund (PIF).
- This investment is expected to provide sufficient liquidity into at least the fourth quarter of 2025.
Worse than expected
5 August 2024 4:08 PM
Quarterly Report
- The company's net loss of $790.251 million and negative free cash flow of $741.302 million indicate worse than expected financial performance.
Capital raise
5 August 2024 4:07 PM
Capital Raise Announcement
- Lucid Group has secured $750 million through a private placement of Series B Convertible Preferred Stock.
- The company has also entered into a $750 million term loan agreement with Ayar Third Investment Company.
Capital raise
6 June 2024 4:10 PM
Annual Meeting Results
- The approval of the increase in shares available for issuance under the stock incentive plan could be used for future capital raising activities.
Worse than expected
24 May 2024 6:58 AM
Restructuring Announcement
- The company is reducing its workforce and incurring significant restructuring charges, which is generally viewed negatively by investors.
Worse than expected
6 May 2024 4:14 PM
Quarterly Report
- Despite increased revenue, the company's net loss remains substantial, indicating that it is not yet on a path to profitability.
Capital raise
6 May 2024 4:14 PM
Quarterly Report
- Lucid secured a $1 billion investment through the issuance of Redeemable Convertible Preferred Stock to Ayar Third Investment Company.
- The company may need to raise additional funds through equity, equity-linked or debt financings in the future.
Capital raise
6 May 2024 4:06 PM
Quarterly Report
- Lucid successfully raised $1.0 billion through a private placement to an affiliate of the Public Investment Fund (PIF).
Worse than expected
6 May 2024 4:06 PM
Quarterly Report
- The company reported a significant net loss of $680.859 million, which is worse than expected.
- The cost of revenue was significantly higher than the revenue generated, indicating challenges in achieving profitability.
Capital raise
25 April 2024 6:06 AM
Proxy Statement
- Ayar agreed to purchase 100,000 shares of our Series A Convertible Preferred Stock for an aggregate purchase price of $1,000,000,000 in a private placement.
- On March, 29, 2024, we issued the shares of Convertible Preferred Stock pursuant to the March 2024 Subscription Agreement and received aggregate proceeds of $1,000,000,000.
Capital raise
29 March 2024 5:08 PM
8-K Filing
- Lucid Group has raised $1 billion through the sale of Series A Convertible Preferred Stock to Ayar Third Investment Company.
- The capital raise is a private placement, not a public offering.
Capital raise
25 March 2024 8:07 AM
Private Placement Announcement
- Lucid Group is raising $1 billion through a private placement of Series A Convertible Preferred Stock.
- The investor is Ayar Third Investment Company, an affiliate of Saudi Arabia's Public Investment Fund.
- The preferred stock is convertible into common stock, potentially diluting existing shareholders.
- The capital raise is expected to close within 10 business days.
Capital raise
27 February 2024 4:09 PM
Annual Results
- The document mentions that Lucid will require incremental investment to meet AML's demand beyond the committed supply, and AML will decide whether to fund such investment.
- The document also mentions that Lucid may be eligible for a loan pursuant to the Advanced Technology Vehicles Manufacturing Loan Program administered by the U.S. Department of Energy.
Delay expected
27 February 2024 4:09 PM
Annual Results
- The document mentions delays in the acceptance of the Project under the Integration Agreement, which may impact timelines set out in the Supply Agreement.
Worse than expected
27 February 2024 4:09 PM
Annual Results
- The company's net loss of $2.8 billion was worse than expected, indicating ongoing financial challenges.
- The company's revenue decreased slightly in 2023 compared to 2022, which was worse than expected.
- The company's cost of revenue increased significantly in 2023, which was worse than expected.
Worse than expected
21 February 2024 4:07 PM
Quarterly Report
- Lucid's net loss of $2.83 billion for the year is significantly worse than the previous year's loss of $1.3 billion.
- The company's negative free cash flow of $3.4 billion for the year is also a significant concern.
- The cost of revenue is significantly higher than the revenue generated, indicating a lack of profitability.
Capital raise
21 February 2024 4:07 PM
Quarterly Report
- The document mentions that Lucid is reliant on future capital raises and funding strategies.
- The company's negative free cash flow and significant losses suggest that additional capital will be needed to fund operations.
Delay expected
15 February 2024 5:17 PM
Current Report
- The 2024 Annual Meeting is delayed by more than 30 days after the anniversary of the 2023 meeting.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.