Saudi PIF-backed electric vehicles maker Lucid Group, Inc. has successfully closed an offering amounting to $1.1 billion in aggregate principal of convertible senior notes due 2030. This closing includes the full exercise of the option granted to the initial purchasers to acquire up to $100.0 million in aggregate principal of these notes, according to a statement.
“We are delighted to have completed this offering, which better positions Lucid for future growth and success, while strengthening our already close partnership with the PIF, and minimizing any effect to existing shareholders,” stated Taoufiq Boussaid, chief financial officer at Lucid. “The support of the PIF continues to be one of Lucid’s key strategic differentiators as we work together toward a more sustainable future.”
Read more: Saudi PIF affiliate invests $1.5 billion in EV maker Lucid Group
Impact of capped call hedges
In connection with the offering, Lucid purchased capped call hedges designed to enhance the effective conversion price of the notes to $4.80 per share of Lucid’s Class A common stock. This figure signifies a premium of 100 percent over the last reported sale price of Lucid’s Class A common stock on The Nasdaq Global Select Market, which stood at $2.40 per share on April 2, 2025. Consequently, the capped call transactions are expected to alleviate potential dilution or cash obligations upon the conversion of the notes due to the increased effective conversion price.
Allocation of net proceeds
The net proceeds from the offering are approximately $1,082.2 million, following deductions for initial purchasers’ discounts, commissions, and estimated offering expenses. Lucid utilized around $118.3 million of the net proceeds to cover the costs associated with the capped call transactions mentioned earlier. Additionally, approximately $935.6 million of the proceeds were allocated to fund repurchases of around $1,052.5 million in aggregate principal of its outstanding 1.25 percent convertible senior notes due 2026. Lucid plans to use the remaining net proceeds for general corporate purposes.
Lucid possesses the flexibility to settle any conversions in cash, shares of its Class A common stock, or a combination of both. This strategic option aims to further manage potential dilution or cash obligations that may arise from any future conversions of the notes.
