Electric vehicle maker Polestar said on Monday it has secured a $400 million equity investment from Feathertop Funding Limited, a special purpose entity consolidated by Sumitomo Mitsui Banking Corporation and Standard Chartered Bank.
This follows an equity investment worth $300 million by Spain’s BBVA and France’s Natixis as well as a loan agreement worth up to $600 million with Polestar’s majority owner, China’s Geely Holding, both in December.
“Following the new equity financing and the funding announcements in December, and with the support of Geely Holding, we continue to make progress on enhancing our liquidity position and strengthening our balance sheet,” said Polestar CEO Michael Lohscheller.
The Swedish automaker is in the midst of a cash crunch while EV demand has broadly slowed down. Like many other EV startups, it burned through significant amounts of cash in its push to achieve scale and has consistently faced challenges managing its liquidity and debt levels.
The company, which has long risked breaching certain debt covenants, has repeatedly negotiated amendments with lenders and agreed with creditors to revise some of the covenants to remain compliant throughout the year.
Neither Sumitomo Mitsui nor Standard Chartered will own more than 10% of Polestar’s outstanding equity after the transaction has closed, Polestar said in a statement.
(Reporting by Rishabh Jaiswal in Bengaluru)
