Lucid Group, Inc., the electric vehicle manufacturer backed by the Saudi Public Investment Fund (PIF), has successfully completed a significant offering of $1.1 billion in convertible senior notes due in 2030. This offering includes the full exercise of an option that allowed initial purchasers to acquire an additional $100 million in aggregate principal of these notes, marking a pivotal moment for the company as it seeks to strengthen its financial position and support future growth.
Taoufiq Boussaid, Lucid’s Chief Financial Officer, expressed enthusiasm about the successful completion of the offering, stating, “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.” The ongoing support from the PIF is seen as a strategic advantage for Lucid as it aims to advance its mission of creating a more sustainable future in the automotive industry.
As part of the offering, Lucid has implemented capped call hedges designed to enhance the effective conversion price of the notes to $4.80 per share of its Class A common stock. This conversion price represents a 100 percent premium over the last reported sale price of Lucid’s stock, which was $2.40 per share on April 2, 2025. The capped call transactions are expected to mitigate potential dilution or cash obligations that could arise upon the conversion of the notes, providing a safeguard for existing shareholders.
The net proceeds from the offering are approximately $1,082.2 million after accounting for initial purchasers’ discounts, commissions, and estimated offering expenses. Lucid has allocated around $118.3 million of these proceeds to cover the costs associated with the capped call transactions. The majority of the funds, approximately $935.6 million, will be used to repurchase about $1,052.5 million in aggregate principal of its outstanding 1.25 percent convertible senior notes due in 2026. The remaining proceeds will be directed toward general corporate purposes, allowing Lucid to maintain flexibility in its financial strategy.
Lucid’s ability to settle any conversions in cash, shares of its Class A common stock, or a combination of both provides the company with additional options to manage potential dilution or cash obligations that may arise from future conversions of the notes. This strategic approach reflects Lucid’s commitment to maintaining a strong balance sheet while pursuing its growth objectives.
The successful completion of this offering comes at a crucial time for Lucid as it continues to navigate the competitive electric vehicle market. With the backing of the PIF and a solid financial foundation, Lucid is well-positioned to capitalize on the growing demand for electric vehicles and expand its market presence.
As the electric vehicle industry continues to evolve, Lucid Group’s strategic initiatives and financial maneuvers will be closely watched by investors and industry analysts alike. The company’s focus on sustainability and innovation, combined with its strong financial backing, positions it as a key player in the transition to electric mobility.
In conclusion, Lucid Group’s recent $1.1 billion offering of convertible senior notes marks a significant step forward in its growth strategy. With the support of the Saudi PIF and a commitment to managing potential dilution, Lucid is poised to enhance its position in the electric vehicle market and drive future success. Investors will be keen to see how the company utilizes these funds to further its mission and achieve its ambitious goals in the coming years.
