{"id":88508,"date":"2024-08-07T00:00:00","date_gmt":"2024-08-07T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/08\/07\/pif-puts-down-an-extra-usd-1-5-bn-for-lucid-motors\/"},"modified":"2024-08-07T00:00:00","modified_gmt":"2024-08-07T00:00:00","slug":"pif-puts-down-an-extra-usd-1-5-bn-for-lucid-motors","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/08\/07\/pif-puts-down-an-extra-usd-1-5-bn-for-lucid-motors\/","title":{"rendered":"PIF puts down an extra USD 1.5 bn for Lucid Motors"},"content":{"rendered":"

PIF extending loan facility + acquiring more shares in Lucid:<\/strong> A unit of the Public Investment Fund (PIF) is pouring a total of USD 1.5 bn in US luxury EV manufacturer Lucid, according to a statement<\/a> from Lucid. The Saudi sovereign wealth fund\u2019s Ayar Third Investment has reached an agreement with Lucid to take USD 750 mn worth of convertible preferred stock via private placement, and commit an additional USD 750 mn through an unsecured delayed draw term loan facility (DDL). <\/p>\n

The proceeds will finance the company\u2019s capex and working capital<\/strong>, among other things, the statement reads.<\/p>\n

What we don\u2019t know: <\/strong>The statement doesn\u2019t provide details on the conditions for the conversion or the implied price per share at which Ayar is buying in, nor does it disclose the withdrawal limits or periods for the DDL. <\/p>\n

Lucid has not yet tapped the DDL<\/strong>, which could signal that the company is keeping it as a fall-back option if it needs more funding to tap into. Lucid CEO Peter Rawlinson said<\/a> in March that his company cannot depend on the \u201cbottomless wealth\u201d of its Saudi owner and therefore needs to raise funds this year. \u201cIt\u2019s inevitable we need to raise in the future, it\u2019s just a question of when,\u201d Rawlinson told the salmon-colored paper. \u201cWe need to pick our moment.\u201d<\/p>\n

REMEMBER- <\/strong>This is Ayar\u2019s second investment in Lucid this year, after it took USD 1 bn<\/a> in convertible preferred stocks last March to fund the EV maker's capex and working capital. <\/p>\n

SOUND SMART-<\/strong> Convertible preferred stock is essentially a kind of hybrid between equity and a bond. There are three keys here: \u201cPreferred\u201d means that Ayar gets dividend payments if Lucid starts making them, just like regular preferred stock. But Ayar is also locking in upside: It\u2019s not buying common stock in the company. If the value of Lucid\u2019s shares go above the price at which Ayar bought in, it can \u2014 if it wants \u2014 swap its convertible preferred stock for ordinary shares and book the difference in value as gain on the investment.<\/p>\n

What about delayed draw term loans? <\/strong>These operate like any other loan facility, only with the caveat that they are withdrawn in set intervals \u2014 allowing for withdrawal periods every three, six, or nine months \u2014 within certain limits, which are both agreed in advance. Lenders could also link withdrawal periods with certain KPIs, if they wish. <\/p>\n","protected":false},"excerpt":{"rendered":"

The funds are split into a stock purchase and a delayed draw term loan<\/p>\n","protected":false},"author":1,"featured_media":88509,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2575],"tags":[3000,10,695,14,1151],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-88508","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ma-watch","tag-ayar-third-investment","tag-enterpriseam-ksa","tag-lucid-motors","tag-ma-watch","tag-public-investment-fund-pif","wpautop","entry"],"acf":{"mongo_id":"b626d69d-6e97-4821-a768-9d025874e116","order":"4","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/3\/2272.jpg","photo_position":"above","homepage_title":"","full_issue_title":"PIF puts down an extra USD 1.5 bn for Lucid Motors","related_issue":[88501],"teaser":"The funds are split into a stock purchase and a delayed draw term loan","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/8\/.bed02bbb-3551-41dc-a377-9839dfa8d107.mp3"},"yoast_head":"\nPIF puts down an extra USD 1.5 bn for Lucid Motors - 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