Lucid Group has announced its plans to raise approximately $3 billion through a new equity offering. The new funding round comes after the automaker has been suffering through heavy losses and an extremely slow production ramp.
According to a press release on Wednesday a significant portion of the funding, $1.8 billion, will come from an affiliate of the Saudi Public Investment Fund (PIF), Ayar Third Investment Company. The PIF currently holds a 60.5% stake in Lucid, and the structure of the new funding round aims to maintain its ownership at the same level.
The remaining funds will be generated through a public offering of more than 173 million new shares, which began on Wednesday.
According to Lucid the new funding will be utilized for “general corporate purposes,” including investments in capital expenditures and working capital. As of its most recent report, Lucid had approximately $3.4 billion in cash on hand and about $700 million in available credit lines as of March 31.
The news of the equity offering caused a decline in Lucid’s shares by more than 7% during after-hours trading.