Lordstown Motors to List Shares Through SPAC

The electrical automaker Lordstown Motors is arranging to go community via a merger with a specific goal acquisition company (SPAC), DiamondPeak Holdings, the companies introduced.

Less than the offer, which implies a $1.6 billion valuation for the company, Lordstown Motors will receive $five hundred million in financing (via a private financial investment in community fairness) from Fidelity, Wellington Administration, the Federated Hermes Kaufmann Tiny Cap Fund, and cash managed by BlackRock. In a assertion, Lordstown Motors said the offer will make it possible for it to start off generation of its flagship Endurance pickup truck in the 2nd fifty percent of 2021.

The company said it has a lot more than 27,000 pre-orders, representing a lot more than $1.4 billion in potential revenue, for what it claims will be the initially entire-dimensions electrical pickup truck to provide the business fleet sector.

The Endurance’s approximated sale selling price is $45,000 web of a $seven,five hundred tax credit rating.

David Hamamoto, Chairman and Main Government Officer of DiamondPeak, said: “We have evaluated hundreds of companies for a lot more than a calendar year and Lordstown stood out as a differentiated, large development company at the confluence of electrical motor vehicles and mild-responsibility vehicles, two very beneficial spots of target and huge possibility in the automotive sector.”

The Lordstown plant was at the centre of controversy over tens of millions of pounds in tax credits Common Motors acquired in exchange for a commitment to hold the plant open up. Last November, GM marketed the 6.two million sq. foot facility to Lordstown Motors. In March, the state of Ohio Enhancement Products and services Company, which oversees economic incentive systems, notified GM it planned to advise that the tax agreements be terminated and the taxes be repaid.

On Monday, GM said it was investing $seventy five million, including “in-sort contributions that have currently been presented,” in Lordstown Motors as portion of the financing offer.

With the offer, Lordstown joins a selection of corporations that have opted to listing by merging with an currently community SPAC rather than via a a lot more standard community offering. Virgin Galactic, in April, raised $720 million via a SPAC listing with Chamath Palihapitiya’s Social Money Hedosophia Holdings.

The financing offer is envisioned to be done in the fourth quarter of 2020. DiamondPeak is transforming its title to Lordstown Motors and transforming its ticker to Trip. It is stated on the Nasdaq.

electrical vehicles, GM, Lordstown Motors, PiPE, SPAC