Li Shufu’s automotive intelligent technology company, Ecarx Technology, in which he invested, has signed a merger agreement with Cova Acquisition Corp. (COVA), a U.S. SPAC company. After the transaction is completed, Ecarx Technology will be listed on the NASDAQ in the United States with the stock code ECX.
In this transaction, the equity value of Ecarx Technology is $3.4 billion, and the equity valuation of the new company after SPAC merger is $3.82 billion.
Obtained financing including:
- $300 million in cash held by COVA in trust;
- Strategic investor Geely Holding Group;
- Additional financing of $45 million from Luminar, a U.S. lidar company, and Lotus Technology.
Currently, COVA and Ecarx Technology’s controlling shareholders have agreed to implement a six-month lock-up period.
Ecarx Technology’s business scope includes:
- Automotive system chips;
- Vehicle central computing platform;
- Integrated digital cockpit;
- Advanced driver assistance system (ADAS);
- Operating system and software for unmanned supervision driving.
Is it certain to do it now?
Ecarx Technology once planned to list on the domestic sci-tech board in 2020, but failed and then turned to listing on the U.S. stock market. After two years of preparation, it is finally going to list on the U.S. stock market.
However, the SEC is particularly strict in reviewing companies that go public through SPAC. Or, companies that go public through SPAC are easily scrutinized by the SEC, such as Faraday Future and Canoo.
As the risks of China-U.S. tensions intensify, the SEC has included many Chinese concept stocks in the “to be delisted” list. NIO has already gone public in Singapore to avoid China-U.S. frictions.
At this point in time, going public in the U.S. through SPAC may put Ecarx Technology at greater risk of SEC scrutiny. But the investors of Ecarx Technology have been ready for years and have no choice but to push through.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.