REE Automotive raises $45M, secures key supply deal with India's Motherson
REE Automotive raises $45M, secures key supply deal with India's Motherson
Electric truck maker partners with Samvardhana Motherson to streamline supply chains and boost production.
REE Automotive has raised over $45 million in a fresh funding round led by M&G Investment and signed a supply chain partnership with Indian auto parts maker Samvardhana Motherson, the electric truck maker said on Monday.
Shares of the Israel-based company jumped more than 12% in premarket trading.
REE completed a merger with a SPAC in July 2021 at an astronomical value of $3.1 billion, but has since lost 99% of its value, beginning the day with a market cap of around $40 million.
REE is looking to streamline its supply chains and bring down the high costs involved in manufacturing costly electric vehicles, as EV startups weather an uncertain economy and sluggish demand.
The company has signed direct share purchase agreements under which multiple investors, including M&G Investments, Motherson, and Varana Capital, will buy more than 11 million REE shares at $4.122 per share.
The $15 billion-worth Motherson, one of India's largest auto parts makers, supplies parts to domestic and global automakers such as Maruti Suzuki, and Mercedes-Benz.
As part of the supply chain partnership, Motherson will manage sourcing and supply chain logistics for all vehicle parts, and support the assembly of the REECorner and REE P7 electric truck models.
It will also nominate a director to join REE’s board of directors.
Following the offering's close on Sept. 19, M&G will hold around 16% of REE's outstanding shares, Motherson will hold around 19% on a non-diluted basis and Varana Capital will hold 8%.
With the Motherson collaboration, REE expects to boost production to meet growing demand and fulfill fleet orders from multi-national customers, the company said, adding that it will use the funds for general working capital.
