China Geely Auto, Seeking Funding from SPAC... Considering $300 Million Financing

(Photo by Reuters)

[Asia Economy Reporter Yujin Cho] Chinese automaker Geely is reportedly considering raising more than $300 million (approximately 336.8 billion KRW) through a SPAC (Special Purpose Acquisition Company), according to the Wall Street Journal (WSJ) on the 13th (local time).

According to sources, Geely is considering merging its European electric vehicle subsidiary with a SPAC to increase its corporate value to over $40 billion.

A SPAC is a paper company established for the purpose of acquiring companies and is used as a backdoor listing route for unlisted companies.

This SPAC is expected to be responsible for investments in new technologies such as artificial intelligence (AI). The WSJ reported, "Since this plan is under internal discussion, the deal may not proceed."

Separately, Polestar, a premium electric vehicle brand jointly established by Geely and Volvo, is also considering a U.S. listing through a SPAC.

It aims for a corporate value of $20 billion, with an expected fundraising amount of around $10 billion through an IPO. Headquartered in Sweden, the premium electric vehicle brand Polestar currently offers two models: Polestar 1 and Polestar 2.

Feeling a relative lag in the transition to electric vehicles, Geely recently reorganized its electric vehicle business strategy and established a new electric vehicle brand, ZEEKR, to compete with Tesla in the U.S. ZEEKR was established as a joint venture with its parent company Zhejiang Geely Holding Group, with Geely owning a 51% stake.