Lotus Technology, a division of Lotus responsible for development of electric vehicles, is about to go public via a SPAC deal.
Also referred to as a reverse merger, a SPAC deal is where a private company goes public by being taken over by a company that’s already listed, typically one set up solely for this purpose, known in investor circles as a special purpose acquisition company (SPAC). The advantage is that it avoids the complexity of the more traditional initial public offering which has more regulatory oversight.
In an announcement on Tuesday, Lotus Technology said it has entered into a reverse merger with the NASDAQ-listed SPAC company L Catterton Asia Acquisition Corp. The deal is expected to be completed on Thursday, after which the combined company, to be known as Lotus Technology Inc., will start trading on the Nasdaq under the ticker symbol “LOT.”
Lotus Technology is based in Wuhan, China, and was responsible for the Lotus Eletre electric SUV and the recently revealed Lotus Emeya electric hatchback. It’s also developing an electric compact crossover.
Lotus Eletre
Lotus Technology is headed by Feng Qingfeng, who will remain CEO of the merged company after the deal closes. The majority of the merged company will also be owned by Lotus Technology’s existing shareholders which include Zhejiang Geely, Etika Automotive, and Nio Capital. Etika is a Malaysian supplier which together with Geely are the primary shareholders of Lotus Technology’s Lotus parent. Nio Capital is an investment firm founded by William Li, the CEO of rival EV firm Nio.
Since the original announcement of the SPAC deal a year ago, more than $880 million has been raised in pre-closing and private investment in public equity financing, Lotus Technology said. The company has previously said it plans to use any raised funds for vehicle development and expanding the sales network.