EV maker Lucid Group plans to raise $3bn, mainly from Saudi PIF

EV maker Lucid Group plans to raise $3bn, mainly from Saudi PIF
From Lucid’s perspective, the proceeds will be utilized for general corporate purposes including capital expenditures and working capital, among others. (Shutterstock)
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Updated 03 June 2023
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EV maker Lucid Group plans to raise $3bn, mainly from Saudi PIF

EV maker Lucid Group plans to raise $3bn, mainly from Saudi PIF

RIYADH: Lucid Group plans to raise $3 billion through a stock offering, 66 percent of which will come from Saudi Arabia’s Public Investment Fund. 

The California-based EV maker said Ayar Third Investment Co., which is its majority stockholder and an affiliate of the PIF, has agreed to buy as much as 265.7 million shares in a private placement for an estimated $1.8 billion, 

It said the remainder will be raised from a public offering of 173.5 million shares of common stock.  

The private placement is expected to close on June 26 of this year. A private placement is a process whereby stocks are sold privately to investors selected beforehand.  

Following these purchases, Ayar Third Investment Co. anticipates maintaining its 60.5 percent ownership of Lucid’s outstanding common stock.  

From Lucid’s perspective, the proceeds will be utilized for general corporate purposes including capital expenditures and working capital, among others.  

Last year, Lucid signed a deal for the construction of a plant in the Kingdom that will produce 150,000 electric vehicles per year.   

The company signed agreements with the Ministry of Investment of Saudi Arabia, the Saudi Industrial Development Fund, and the Economic City at King Abdullah Economic City.  

The American luxury vehicles company is expected to receive financing and incentives of up to $3.4 billion over the next 15 years to build and operate the manufacturing facility in the Kingdom.  

Located in King Abdullah Economic City, AMP-2 is the PIF-backed EV manufacturer’s first production facility outside the US.  

“We are keen to achieve high and sustainable human capital localization in line with Vision 2030,” Global Vice President and Managing Director at Lucid Faisal Sultan told Arab News in April.  

“With our recently launched Lucid Future Talent program — in collaboration with the Human Resources Development Fund — we plan to provide the right training to enrich and prepare local talent to fill future job opportunities in the Kingdom,” Sultan explained. 

 


Monsha’at, E-Commerce Council organize tour to promote online trade 

Monsha’at, E-Commerce Council organize tour to promote online trade 
Updated 15 sec ago
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Monsha’at, E-Commerce Council organize tour to promote online trade 

Monsha’at, E-Commerce Council organize tour to promote online trade 

RIYADH: Saudi Arabia can expect a considerable penetration of online trading as the General Authority for Small and Medium Enterprises, or Monsha’at, organized the third phase of its tour with the E-Commerce Council on Monday. 

According to the Saudi Press Agency, the tour concludes on Wednesday and has witnessed the participation of service providers and e-commerce specialists. 

The tour included discussions on developing an environment conducive to developing e-commerce in the Kingdom and the platform's role in various government sectors, including transportation, rural and municipal affairs, housing and SMEs. 


Saudi Arabia dispatches first crude iron shipment to US

Saudi Arabia dispatches first crude iron shipment to US
Updated 13 min 31 sec ago
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Saudi Arabia dispatches first crude iron shipment to US

Saudi Arabia dispatches first crude iron shipment to US

RIYADH: Saudi Arabia has strengthened its position in global supply chains after a ship loaded with 37,000 tons of crude iron set sail from the Port of Jazan City to New Orleans, US.

According to the Saudi Press Agency, this product marks a significant milestone as it is the first to be manufactured within the region, produced at the Advanced Smelting Industries Co. factory in Jazan.

Crude iron, also known as pig iron, is a more brittle form of the material and is used in steel production.

Traditionally recognized for its vast oil reserves, the Gulf nation has been proactively pursuing economic diversification, as outlined in Vision 2030.

The successful production and export of crude iron are crucial steps toward achieving this goal.

The Port of Jazan City boasts extensive capabilities and advanced logistical transportation services, solidifying its status as a pivotal trade hub in Saudi Arabia.

Positioned as one of the region’s most modern ports, it lies along the international trade route through the Red Sea, in close proximity to the Bab Al-Mandab Strait, various African nations, and the maritime Silk Road.

Consequently, this port is a crucial gateway for the southern regions and neighboring countries.


Saudi SWCC signs 5 agreements to localize the water industry

Saudi SWCC signs 5 agreements to localize the water industry
Updated 55 min 6 sec ago
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Saudi SWCC signs 5 agreements to localize the water industry

Saudi SWCC signs 5 agreements to localize the water industry

RIYADH: Amid efforts to localize the water industry and support advances and innovative technologies, Saudi government firm Saline Water Conversion Corp. has inked five deals with prominent organizations and companies.

During the second session of the Innovation Driven Desalination Conference 2023 in Jeddah, two agreements were signed with the Small and Medium Enterprises General Authority, also known as Monsha’at, and University of Tabuk.

The remaining three deals were in agreement with software firm UiPath, design and manufacturer Fluid Equipment Development Co., and American chemicals corporation Dow, the Saudi Press Agency reported.


Oman’s total foreign assets rise 27.4% to $17.82bn

Oman’s total foreign assets rise 27.4% to $17.82bn
Updated 03 October 2023
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Oman’s total foreign assets rise 27.4% to $17.82bn

Oman’s total foreign assets rise 27.4% to $17.82bn

RIYADH: The total foreign assets of the Central Bank of Oman increased 27.4 percent year on year to 6.86 billion Omani riyals ($17.82 billion) by the end of July, according to its statistics authority. 

The National Center for Statistics and Information also reported an annual increase of 4.9 percent in local liquidity by the end of July. 

While reporting the figures, Oman News Agency found that private sector deposits in commercial banks and Islamic windows were 18.17 billion riyals by the end of July, up 6.5 percent compared to the year-ago period. 

An Islamic window is a section of a conventional bank offering Shariah-compatible products and services. 

The state-run agency further reported that total loans and financing in commercial banks and Islamic windows grew 8.7 percent year on year to 30.27 billion riyals. 

On Sunday, S&P Global Ratings upgraded Oman’s long-term credit rating from “BB” to “BB+.” 

The report by S&P Global underscores a transformation in Oman’s non-oil sector, which promises substantial growth in the years ahead, particularly between 2023 and 2026. 

“Oman’s economy depends on the oil sector, which accounts for about 30 percent of GDP (gross domestic product), 60 percent of goods exports, and 70 percent of government fiscal receipts. This dependence weighs on our assessment of its fiscal and external resilience, and we reflect this in the rating,” said S&P Global in the report. 

The report also touched upon the banking sector, which witnessed a marked boost in credit balance, registering a growth of 5.3 percent in July compared to the same month the previous year.  

Meanwhile, in September, NCSI data revealed that Oman’s gross domestic product registered a 9.5 percent decline in the second quarter of 2023 compared to the same period last year, driven by a decrease in oil activities. 

GDP at current prices fell to 10.08 billion rials in the second quarter compared to the 11.14 billion rials recorded during the same period of the previous year. 

Moreover, the GDP at current prices for the first half of 2023 experienced a 2.4 percent decline, reaching 20.39 billion rials compared to the same period last year. 


Saudi economy to remain in trillion-dollar club through 2026, economists predict

Saudi economy to remain in trillion-dollar club through 2026, economists predict
Updated 10 min 21 sec ago
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Saudi economy to remain in trillion-dollar club through 2026, economists predict

Saudi economy to remain in trillion-dollar club through 2026, economists predict
  • Budget deficit not seen hurtful in view of increased government spending to stimulate growth

RIYADH: Saudi Arabia’s preliminary budget for 2024 not only signifies its commitment to structural reforms but also indicates that the country’s gross domestic product is on track to exceed the SR4 trillion ($1.1 trillion) mark for five consecutive years until 2026.

In an analysis featured in Independent Arabia, Ghaled Darwish, an economist and journalist, attributed the growth to robust government spending with a focus on non-oil sectors as part of its economic diversification plans.

In a significant milestone, the Kingdom crossed the GDP threshold for the first time in 2022, reaching SR4.156 trillion. Building on this momentum, analysts predict a GDP of SR4.136 trillion in 2023, SR4.26 trillion in 2024, and SR4.5 trillion in 2025, ultimately culminating in SR4.8 trillion by 2026.

However, this optimistic economic trajectory is not devoid of challenges. The backdrop of increased spending combined with reduced oil production has led Saudi Arabia to anticipate a budget deficit.

Contrary to earlier expectations of a fiscal surplus, the Kingdom foresees a deficit nearing 2 percent for the current fiscal year. In continuation, the preliminary 2024 budget statement alludes to an expected deficit of approximately 1.9 percent of the GDP.

Total expenditures for the forthcoming year are likely to reach approximately SR1.25 trillion. In contrast, revenues are projected at SR1.17 trillion.

Saudi Arabia augmented its expenditures for the current year by an estimated 13 percent, compared to the figures announced at the outset of 2022.

In an interview with Independent Arabia, Saudi economist and financial researcher Mohammad Al-Shemimri said there is an ongoing disagreement among economists about whether the deficit is a negative thing in Saudi Arabia’s budgets, even if the trend continues for many years.

He added: “This deficit may not affect the country’s economy if its levels are controlled, and also if it is caused by increased spending to enhance economic growth and spending on infrastructure, health and education.”

The revised spending now stands at SR1.26 trillion, a significant leap from the initial projection of SR1.11 trillion.

In terms of revenue, the 2023 forecast stands at SR1.18 trillion, a favorable increase from the previous estimate of SR1.13 trillion.

Ahmed Al-Shehri, an economist, said: “When looking at the expected deficit next year, we must take into account that the government budget reflects a balance between revenues and expenditures, and can be affected by many factors such as oil prices and global economic shifts.”

Furthermore, the Kingdom remains unwavering in its dedication to its social support framework. Such initiatives aim to safeguard Saudi citizens from potential financial impacts on both the domestic and international fronts, Darwish added.

This protective stance also extends to ensuring a steady supply and affordability of essential imported goods and services.