Lotus to go public via IPO with L Catterton Asia
The Geely subsidiary Lotus has announced its intention to list its electric car division Lotus Technology on the stock exchange. Accordingly, the plan is to list on the US stock exchange Nasdaq through a merger with L Catterton Asia Acquisition Corporation, which is already listed there.
The plans, which were leaked about a year ago, are now becoming concrete with an official announcement from the company. The business combination implies an estimated enterprise value of about $5.4 billion for Lotus Tech, according to the announcement. Lotus has not yet named a specific date for the IPO.
A US IPO via SPAC merger has become a popular way for a fast-growing company to get listed on the Nasdaq. The regular route can take up to two years. Therefore, a business segment has emerged for companies that go through the lengthy process after being founded with investor money. Since the purpose of this, then-listed company without its own core business is to merge with a company that is not yet listed and thus help it to go public in a short way, they are also called Special Purpose Acquisition Company or SPAC for short.
In Lotus Tech’s case, the merger is to be with L Catterton Asia Acquisition Corporation, which is affiliated with L Catterton, a “leading global consumer-focused investment firm,” according to Lotus. Lotus Tech’s current management team, led by CEO Qingfeng Feng, is expected to continue to lead the merged company. “We believe the proposed business combination and listing will help position Lotus Tech as a leading global luxury EV company and enable us to further execute our strategy, accelerate our growth and, most importantly, advance our mission to steer the industry toward a more sustainable future,” Qingfeng Feng said.
Lotus Technology had started production of its first electric model, Eletre, in the Chinese city of Wuhan last year. The plant there is designed for an annual capacity of 150,000 vehicles. However, the plant itself belongs to Geely Holding, which will continue to hold shares in Lotus Tech. Even after the IPO, Lotus intends to focus on its “asset-light business model,” according to the announcement. In other words, it will take care of the development and sales of the vehicles. For the production of the vehicles, plants and facilities of another company will be used – in this case Geely.
The Lotus Eletre is expected to be delivered in China before the end of the first quarter of 2023 and in the EU and the UK later in the year. Prices have also already been announced. In the future, Lotus also plans to offer the Eletre in the US and the rest of the world.
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