Part of the iconic Lotus brand is heading to the stock market.
Overnight, the company announced that it will list Lotus Technologies on the NASDAQ stock exchange, but instead of using a traditional initial public offering (IPO), it will merge with L Catterton Asia Acquisition Corp.
This is a firm backed by Bernard Arnault, one of the founders of LVMH Moët Hennessy Louis Vuitton and, according to Forbes, the richest person in the world.
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By merging with a special purpose acquisition corporation (SPAC), majority shareholder Geely avoids the hassle and scrutiny of regulatory filings associated with an IPO. Geely has already used this method to list Polestar, but used a traditional IPO to float part of Volvo Cars.
The deal is said to value Lotus Technologies at $US5.4 billion ($7.7 billion), but due to the brand’s confusing corporate structure, a core part of the Lotus brand and mythology will remain off the market for now.
Lotus Technology’s existing shareholders, such as Geely, Etika Automotive and Nio Capital, will retain an 89.7% stake in the new merged company and are expected to remain in place for the foreseeable future.
Lotus Technologies houses all of the brand’s technology, sales and marketing functions and describes itself as “dedicated to the supply of luxury battery electric vehicles, including SUVs and sedans.”
The division’s first vehicle, the Eletre, is an electric crossover launched in March 2022. It will go on sale in China in the first quarter of 2023 and arrive in Australia in 2024.
It is based on a specially developed EV architecture that will continue to underpin another crossover as well as a large sedan.
As with other sports brands, sales of the Lotus lifestyle range are expected to easily eclipse its sports cars and bring in the bulk of revenue and profit.
According to the company, it will continue to pursue its “asset-light business model” and focus on vehicle development and sales. Production for the Lotus lifestyle range of vehicles will take place in China at a Geely-owned factory that has an annual capacity of 150,000 cars.
Lotus Technology currently has research and development facilities in Coventry, UK and Frankfurt, Germany, as well as three centers in China located in Wuhan, Shanghai and Ningbo. The company says it will keep its headquarters in Wuhan.
Lotus Cars, which owns the plant in Hethel, UK, and makes sports cars such as the Emira and Evija, is not part of today’s float announcement.
While Lotus Cars works closely with Lotus Technology, it is separately owned by Malaysia-based Geely and Etika Automotive. In 2017, Geely bought a 51% stake in Lotus, as well as 49% in Proton, from Malaysian conglomerate DRB-HICOM.
As part of today’s agreement, Lotus Technologies will become the global distributor for Lotus-branded vehicles and has the option to buy Lotus Cars in the future if it chooses.
The money raised from the listing will be used for vehicle development, expansion of the brand’s distribution network and “general corporate purposes”.