Saudi Arabia’s main sovereign wealth fund is on paper gains of more than 30 times from its investment in Lucid Motors Inc.
Photographer: David Paul Morris / Bloomberg
Photographer: David Paul Morris / Bloomberg
The second time, it proved the charm of Saudi Arabia’s foray into electric vehicles.
The kingdom’s main state investment fund is on paper gains of more than 30-fold from its investment in Lucid Motors Inc., with the value of its stake increasing as part of a deal to disclose the company.
The result is a boost to the $ 400 billion public investment fund after missing an epic rally Tesla Inc. shares when it sold much of its 5% stake in the market leader at the end of 2019.
The PIF, as the fund is called, will hold a 62% stake in Lucid once the acquisition of the auto maker by Churchill Capital IV for special purposes is completed. The holding company would be valued at approximately $ 32 billion, based on Church Capital IV’s current stock price.
The deal would represent a jackpot for the PIF, which invested $ 1 billion in Lucid in 2018 and is expected to bring in another $ 600 million in funding for the company before the SPAC deal closes. It also participated in a $ 2.5 billion private investment in public equity, or PIPE, the largest of its kind ever for a SPAC deal.
Under the leadership of Yasir Al-Rumayyan, the PIF has shifted investment priorities from state-owned holdings to building stakes in companies such as Uber Technologies Inc. and Jio Platforms Ltd., the digital services company operated by Indian billionaire Mukesh Ambani.
The fund’s investment return has increased from about 3% between 2014 and 2016 to 8% between 2018 and 2020, according to the PIF website. It has more than doubled its assets in the five years since Crown Prince Mohammed bin Salman was chairman.
The investments are part of a strategy that aims to increase the returns on the kingdom’s wealth while diversifying the Saudi economy and creating jobs.
Bloomberg News reported in January that Lucid was in talks with the PIF to potentially build a factory near the Red Sea city of Jeddah, although the automaker’s CEO, Peter Rawlinson, said on Tuesday there were no upcoming plans to build a factory in the kingdom.
– With help from Edward Ludlow and Filipe Pacheco