Lotus Tech to acquire majority stake in Lotus UK from Geely

NEW YORK - Lotus Technology Inc. (NASDAQ: LOT), a prominent intelligent and luxury mobility provider whose stock has declined nearly 79% over the past year, is set to acquire a 51% equity interest in Lotus Advance Technologies Sdn Bhd (Lotus UK) from Geely International (Hong Kong) Limited. The transaction, announced today, follows Geely’s exercise of a put option on Sunday, based on an agreement dated January 31, 2023. According to InvestingPro data, the company currently operates with moderate debt levels and faces challenges with weak gross profit margins of about 13%.

Lotus UK, known for its sportscar and hypercar manufacturing, as well as engineering consultancy services, will be purchased through a non-cash transaction using pre-agreed pricing. This strategic move will allow Lotus Tech to consolidate Lotus UK’s financial results and control the manufacturing operations, enhancing the company’s brand integration. The acquisition comes as Lotus Tech reports significant revenue growth of 213% in the last twelve months, though InvestingPro analysis indicates the company’s financial health remains challenged with an EBITDA of -$739 million.

The acquisition, anticipated to be finalized by 2025, is contingent upon regulatory approvals. It is part of a broader business combination with L Catterton Asia Acquisition Corp, a special purpose acquisition company. The put option’s exercise was conditioned on Lotus UK and its subsidiaries selling over 5,000 vehicles in 2024, a milestone that was achieved by the end of last year.

Mr. Qingfeng Feng, CEO of Lotus Tech, expressed confidence that this acquisition will bolster the company’s brand equity and operational flexibility, ultimately benefiting shareholders with substantial long-term value.

The financial terms involve Lotus Tech issuing new shares valued at $10 each to Geely for their Lotus UK shares, with the valuation of Lotus UK based on a formula considering revenue, cash, and debt from its 2024 audited financial report.

Lotus Technology Inc. operates globally, with its core markets including the UK, the EU, and China. The company is focused on producing luxury electric vehicles and advancing automobility technologies such as electrification and digitalization.

This news is based on a press release statement and contains forward-looking statements subject to risks and uncertainties. Lotus Tech has not updated any forward-looking statements since the date of the press release. InvestingPro subscribers have access to 12 additional key insights about Lotus Tech, including detailed financial health metrics and expert analysis that could help evaluate the potential impact of this acquisition.

In other recent news, Lotus Technology Inc. announced the appointment of Mr. Daxue Wang as its new Chief Financial Officer, effective immediately. Mr. Wang brings extensive experience from his previous roles at Radar Auto, Zhejiang Kangsheng, and financial institutions such as Morgan Stanley and Citi Group. Additionally, Ms. Catherine Cai has joined the board as an independent director, bringing over thirty years of investment banking experience from UBS, Citigroup, and Bank of America Merrill Lynch. These changes follow the resignation of Mr. Alexious Lee from the CFO position for personal reasons, although he will remain on the board. CEO Mr. Qingfeng Feng expressed confidence in Mr. Wang’s potential to enhance financial operations, while Chairman Mr. Donghui Li highlighted Ms. Cai’s expertise as beneficial to shareholders. These appointments reflect Lotus Technology’s strategic focus on strengthening its leadership team. The company continues to operate in the UK, EU, and China, advancing in luxury electric vehicles and automobility technologies.

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