By
Chimamanda U. Martha
October 10th, 2023
Following the SPAC merger, the current investors in the Swedish Polestar outfit will roll their investments in the new company and retain as much as 94% of the combined entity.
Polestar Automotive Company, a Swedish electric car manufacturer, is on track to go public in the United States of America through a merger with a Special Purpose Acquisition Company (SPAC) backed by billionaire Alec Gores and investment bank Guggenheim Partners. According to a CNBC report, the Polestar SPAC deal with Gores Guggenheim Inc (NASDAQ: GGPI) currently has an enterprise value of $20 billion and is on track to retest how much interest investors have for related public debut deals as well as EV stocks.
The place of electric vehicles in combating climate change is one that is becoming recognized by several countries around the world. While the future of Electric Vehicles is green, the potential SPAC public listing pathway that is being explored by EV makers has been under tight scrutiny from regulators in recent times. Per the CNBC report, the United States Securities and Exchange Commission (SEC) has shined its radar on potential startups exploring SPAC options over their disclosures.
While being valued at $20 billion, the second-largest since the $24 billion blank check merger of Lucid Group Inc (NASDAQ: LCID) with Michael Klein’s Churchill Capital IV Corp back in the first quarter, the Polestar deal is billed to be backed by cash proceeds of about $800 million from Gores Guggenheim. The cash proceeds will be actualized provided the public shareholders of the SPAC outfit make no redemptions of their shares.
The SPAC deal will also feature a PIPE, or private investment in public equity, of $250 million from top-tier institutional investors. Trailing the news, the shares of Gores Guggenheim soared 2.70% in the Pre-Market to $10.26 each.
Swedish Polestar Group: Proposed Outlook Post-SPAC Merger
Polestar Automotive Company was established back in 1996 and is currently co-owned by Swedish multinational manufacturing corporation, Volvo AB (STO: VOLV-B), and Geely Automobile Holdings Ltd (HKG: 0175), with equity ownership by other investors like Hollywood actor Leonardo DiCaprio.
Following the SPAC merger, the current investors in the Swedish Polestar outfit will roll their investments in the new company and retain as much as 94% of the combined entity. The company will be named Polestar Automotive Holding UK Ltd. and will trade under the symbol “PSNY” on the Nasdaq Global Select Market.
The company also has ambitious plans for its auto deliveries in the mid to long term. While the firm reported the delivery of 10,000 of its car brands in the 2020 financial year, it plans to deliver as many as 290,000 vehicles per year by 2025. In addition to its Polestar 1 and Polestar 2 models, the company plans to launch three new models by 2024, a move to increase its competitiveness in the fast-expanding world of electric vehicles.
At the moment, Polestar’s electric cars are being driven on the streets of North America, Europe, and Asia respectively.