Lucid Group (NASDAQ: LCID) was largely supposed to raise additional cash by opting for a cash exercise of its warrants. However, according to the company’s press release, Lucid Group opted for a cashless exercise in order to minimize dilution.
Company CEO and CTO Peter Rawlinson said in the press release:
“We are pleased to announce the cashless redemption of our public warrants. “
He then noted:
“This is an important step in streamlining our capital structure to eliminate ongoing public mandates at the same time as we see growing confidence in Lucid’s revolutionary in-house electric vehicle technology, which will soon hit the market in Lucid Air. “
By opting for a cashless exercise, holders of Lucid Group warrants will be deemed to have paid the exercise price of $ 11.50 by delivering 0.5542 Class A common shares. In other words, each warrant subscription will be converted into 0.4458 Class A ordinary shares of the Lucid group.
This method of exercise will exclude any possibility of immediate dilution. In addition, the development also highlights the confidence that Lucid Group maintains in the strength of its balance sheet.
Today’s development follows news we released yesterday regarding Lucid Group’s international expansion footprint. Namely, the Standardization and Metrology Authority of the Kingdom of Saudi Arabia (KSA) has now indicated that the electric vehicle maker will likely start its electric vehicle production line in the Kingdom by 2024. As a reminder, the Saudi PIF has invested $ 1.3 billion in Lucid Group. in 2019. Even after the company goes public, the fund retains a significant share of the ownership of the company.
Keep in mind that Lucid Group currently has over 10,000 reservations for the Air EV and plans to deliver at least 20,000 units to the North American and EMEA markets in 2022, with deliveries to China not starting until 2023. In addition, the Lucid Gravity SUV is now scheduled to launch in the second half of 2023. Additionally, deliveries of the Lucid Air Dream Edition are now scheduled to begin in September / October 2021.