REE Automotive Ltd. (NASDAQ:REE) shares are trading higher after it announced a strategic deal with Motherson Group.
REE Automotive has secured $45.35 million from investors, including M&G Investments and Motherson, through a direct offering of 11 million Class A shares at $4.122 each.
The proceeds are expected to support general working capital, and the offering is set to close by September 19, 2024, pending standard conditions.
REE's largest shareholder M&G Investments led the $45.35 million investment in REE Automotive with $20 million, followed by Motherson's $15 million. Post-offering, M&G will hold approximately 16% of REE's issued and outstanding ordinary shares; Motherson will hold approximately 19% on a non-diluted basis and, similarly, Varana Capital 8%.
As per the deal, Motherson will handle sourcing and supply chain management for all production parts and support the assembly of REE's REEcorner and REE P7 electric trucks.
This collaboration with Motherson will enhance REE's production capabilities and industry relationships, supporting its expansion and meeting rising demand for its unique software-driven medium-duty electric trucks, expected to play a significant role in the transition to electric fleets worldwide.
Motherson, a major automotive supplier, will also appoint a director to REE's board.
REE Co-founder and CEO, Daniel Barel, said, "Motherson's global footprint and manufacturing prowess combines perfectly with REE's technology and innovation mindset. This combination will benefit our customers and investors alike, by pushing forward the transition towards electrification and carbon neutrality."
As of March 31, 2024, REE's cash and equivalents stood at $77.5 million.
Price Action: REE shares are up 36% at $4.032 at the last check Monday.
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