Geely’s iconic Lotus Cars plans to raise RM4.13bil

Geely is working with advisers to sound out potential investor interest in a funding round that could value Lotus’s EV operations at about US$5bil

HONG KONG: Zhejiang Geely Holding Group Co is considering raising about US$1bil (RM4.13bil) to help expand its iconic British sports and racing automotive business Lotus Cars into the electric vehicles (EVs) market in China, according to people familiar with the matter.

Geely is working with advisers to sound out potential investor interest in a funding round that could value Lotus’s EV operations at about US$5bil, the people said, asking not to be identified because the matter is private.

Separately from the fundraising, the Chinese company is also weighing an initial public offering (IPO) of Lotus Cars, or just the British carmaker’s EV business, as soon as next year, the people said.

A listing could value the entire business, including its combustion-driven sports and racing cars, at more than US$15bil, the people said.

Geely Automobile Holdings Ltd shares rose as much as 7.6% yesterday in their biggest intraday gain since Jan 26. The stock closed 5% higher, outperforming a 1.4% increase in the benchmark Hang Seng Index.

Chinese billionaire Li Shufu’s Geely, which also controls Sweden-based Volvo Car AB, purchased a stake in Group Lotus in 2017. It owns 51% of the company, including both Lotus Cars and consultancy Lotus Engineering, while Malaysia’s Etika Automotive Bhd owns the remainder, according to a press release.

Under Geely, Lotus in 2019 launched its all-electric Evija hypercar, a 1,972-horsepower coupe that costs about US$2mil.

Considerations are ongoing and details including size and timing could change, the people said. A Geely representative declined to comment. Representatives for Lotus didn’t immediately comment when contacted by Bloomberg News.

Geely is seeking to expand into EVs amid a booming market in countries including China. Polestar, the electric carmaker controlled by Volvo Car and its owner Geely, is exploring options for going public as soon as this year, Bloomberg News has reported.

Investor mania over EV-related stocks has pushed the share prices of players including Nio Inc and Xpeng Inc to stratospheric levels. That intense interest has also spawned a wave of EV upstarts raising billions and racing to list via special-purpose acquisition companies (SPACs).

More than US$180bil has been raised globally through SPAC IPOs in the past 12 months, Bloomberg-compiled data show. — Bloomberg

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