Geely to sell all share back to Lotus!

Geely exercises its Put Option on Lotus UK, enabling reintegration of all businesses under the Lotus brand

Bear with me, as this one is a bit complicated and jargon-heavy. Lotus Technology Inc. announced that Geely, the majority...

electrek.co

Not sure if this has been posted, but I thought this looked interesting

 

[allenyao09]

Used AI to generate the summary below. It doesn't mean Geely is getting out of Lotus.

• Share Exchange Instead of Cash: Rather than paying cash for Geely’s Lotus UK stake, Lotus Technology Inc. will issue new shares—valued at $10 per share—as compensation. This means Geely won't receive liquid funds; instead, it will get equity in Lotus Technology.
• Shifting Ownership Focus: Geely previously held a 51% stake in Lotus UK, the segment focused on manufacturing and engineering consulting. By exercising the put option, Geely is opting to exchange that stake for shares in Lotus Technology, which is the R&D and design arm. As a result, Geely’s involvement shifts from directly controlling a manufacturing entity to holding an ownership interest in the consolidated Lotus Technology entity.
• Implications for Lotus Overall:
  • Unified Operations: This move is part of Lotus's broader strategy to integrate all of its operations—design, R&D, and manufacturing—under a single brand. The consolidation could lead to enhanced operational flexibility and a more cohesive brand identity.
  • Strategic and Financial Impact: While the share-swap helps preserve Lotus Technology’s cash, it dilutes the existing shareholders by issuing new shares. Moreover, without Geely’s direct operational control over the manufacturing arm, Lotus may need to bridge the gap in technical expertise, especially in areas like battery electric vehicle (BEV) development.
  • Geely’s Role: Even though Geely will now hold shares in Lotus Technology, its role will likely be more passive, as it moves away from direct management of the manufacturing operations. This could signal a reduced operational influence on Lotus’s day-to-day decisions moving forward.

 

[geoffbland]

So if I understand this correctly, Geely is taking ownership of Lotus UK under the “Lotus Technology” banner. Does that mean Lotus as a UK brand no longer exists?

From reading elsewhere Lotus UK was not a UK brand prior to this. Lotus UK was privately owned, 51% Geely, 49% Etika (the Malaysian company).
Now that 51% of Lotus UK is owned by Lotus Technology which in turn is also part owned by Geely. It's not clear what %age Geely will now own of the new parent company and what share Etika and L Catterton will have. I guess previously Lotus UK and Lotus Technology were sister companies - now Lotus Technology is the parent company of Lotus UK, although it's not clear if Lotus UK still exists as an financial entity.

Lotus Engineering (the consultancy firm) is completely separate, was and remains a UK company.

 

[geoffbland]

Used AI to generate the summary below. It doesn't mean Geely is getting out of Lotus.

AI doesn't mention that Lotus Technology is majority owned by Geely - as this is not very clear in the press release either. So the part about Geely becoming more "passive" may not be correct.

 

[Racer X]

Maybe GMA would be interested in acquiring a piece of Lotus…

 

[Biggles of Norwich]

https://finance.yahoo.com/news/lotus-technology-acquire-51-equity-123000265.html

So if I understand this correctly, Geely is taking ownership of Lotus UK under the “Lotus Technology” banner. Does that mean Lotus as a UK brand no longer exists?

That depends on what you define a "UK brand" to be. It hasn't been a UK owned brand for many years, but it is still a brand with a UK base. Brands are somewhat of a nonsense these days, given the brand can be traded without any real connection to the people and organisation that built the brand value. MG is a good example.

 

[robrmon]

Looking at the LOT share price it’s down to 1.28 having been around 10 for sometime around 2023. Ouch.

 

[Nick in Sydney]

This story isn't really the big news it seems. The plan was always that Lotus Technology would eventually take full ownership of Lotus Cars. This was noted in the original Lotus Technology investor presentations. They are tidying up a very messy corporate structure that investors find hard to understand.

This doesn't mean Geely is less or more committed to Lotus. As others have stated, Geely already owns just over half over Lotus Tech, and this will increase slightly with the Lotus Cars transaction. The Malaysians own about 30% and the rest is L Catterton or publicly held.

 

[Yorkie]

So this is just moving the deckchairs around.

Lets hope they're not doing it in a Titanic sort of way!

 

[cyanmauve]

Maybe GMA would be interested in acquiring a piece of Lotus…

Man, I’d love a Gordon Murray influenced Lotus. Just keep him away from the styling.

 

[Rcktmn]

Man, I’d love a Gordon Murray influenced Lotus. Just keep him away from the styling.

I said this in another thread already, but if the Evija had a GMA powertrain, they'd sell out right away

 

[geoffbland]

I said this in another thread already, but if the Evija had a GMA powertrain, they'd sell out right away

Isn't the Evija a limited run of 130 cars and already sold out?

 

[Six Speed Stephen]

Isn't the Evija a limited run of 130 cars and already sold out?

No they “sold out first year of production” which is probably like 4 cars.

 

[Hethel Merman]

No they “sold out first year of production” which is probably like 4 cars.

That was way back in 2019.

 

[Rcktmn]

I watched a top gear episode the other day and they said 'nobody wants them' so I assumed they were having trouble selling them. Maybe that's not the case?

 

[DerTheDer]

I watched a top gear episode the other day and they said 'nobody wants them' so I assumed they were having trouble selling them. Maybe that's not the case?

For reference, when I did the chat tool on Lotus website, once the human got on the line they said "Are you interested in purchasing an Evija?" I thought this was odd since yes, I had also heard that they were all spoken for. Looks like they are still trying to sell allocations.

 

[Teshoo Lama]

I watched a top gear episode the other day and they said 'nobody wants them' so I assumed they were having trouble selling them. Maybe that's not the case?

I think he was referring to electric hypercars in general, and he's correct I suppose. Porsche have shelved theirs, and the Rimac Nevera was a complete flop.

After watching the Top Gear review, the Evija was utterly stunning, inside and out. What a shame the project will likely die a quiet death, due to its powertrain.

I don't blame Lotus at all for this mistake, but I agree with @Rcktmn - if the Evija had a Cosworth V12 in the back, it would be superior to anything coming out of GMA, and Lotus would have the mother of all halo cars on their hands. You've got to hand it to Murray to have the foresight to stick with the V12 and ignore the EV guff going on around him.

 

[Eagle7]

Because they designed the car with the batteries where an engine would be, they may be able to reconfigure it for a V12. They'd probably sell a lot more of them if they did.

 

[Nick in Sydney]

I watched a top gear episode the other day and they said 'nobody wants them' so I assumed they were having trouble selling them. Maybe that's not the case?

I noticed that the Top Gear cars were #22 and #23. So they've built at least 23 Evijas . . . though how many are customers cars is unknown. We also know that the eight Fittipaldi edition Evijas sold out (or at least that they took deposits on all of them!).