PIF makes billions on its investment in Lucid Motors

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DUBAI: The Public Investment Fund, Saudi Arabia’s premier investing institution, has seen a multi-billion dollar increase in the value of its investment in Lucid Motors, the fast-growing Californian electric vehicle manufacturer, as a result of recent transactions.

PIF put $1 billion into Lucid in 2018, giving it a majority stake in the California-based company when it was at the early stages of designing advanced luxury electric cars. With the first model, the Air, unveiled and set for first delivery this year, that stake is now worth a lot more.

In a complex financial transaction recently unveiled in the US, Lucid will merge with a special purpose acquisition company, or SPAC — a company specifically designed to get an initial public offering (IPO) and a valuation on a stock market.

The SPAC involved with Lucid is Churchill Capital Corp IV, a creation of investment banker Michael Klein, who is well known for his investment advisory work in the Kingdom, including the record-breaking IPO of Saudi Aramco in 2019.

The SPAC deal gives Lucid a formal valuation of $24bn, and the PIF remains the majority investor in the new set-up.

The PIF declined to give a detailed breakdown of the value of its investment, but the documents published in the SPAC transaction show it at around $15bn – and will possibly be worth a lot more once vehicles start being sold.

Shares in Churchill gyrated wildly in the days before the deal with Lucid was formally announced but settled well above the value at which PIF and other big investors bought into the company.

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