Harley-Davidson to spin off electrical motorbike division

Motorbike maker Harley-Davidson is spinning off its electrical bikes division and itemizing it on the inventory market via a merger with a blank-cheque firm, taking an analogous route as different electrical automobile teams which have gone public.

Harley’s electrical motorbike unit, LiveWire, is about to merge with AEA Bridges Affect Corp, a particular function acquisition firm (Spac) run by executives of personal fairness agency AEA Buyers and funding group Bridges Fund Administration. The deal offers LiveWire an enterprise worth of $1.8bn.

LiveWire’s itemizing makes it the newest electrical automobile firm to go public by way of a Spac deal this yr as buyers have clamoured to fund firms promising to revolutionise the way forward for transport.

Nevertheless, as curiosity within the Spac market has plunged from frenzied highs initially of the yr, so too have shares in electrical automobile firms, a number of of which have little to no revenues.

Jochen Zeitz, chief government, instructed the Monetary Occasions that Harley’s lengthy document as a producer set it aside from nascent electrical automobile firms.

“This isn’t the founder-led start-up that has no historical past,” Zeitz stated. “It is a [more than 100] yr outdated firm with a strong administration workforce that’s spinning off a enterprise that we imagine in,” he added.

A number of high-profile electrical automobile firms which have listed by way of Spacs have since confronted scrutiny from regulators.

Final week, the US Securities and Change Fee subpoenaed electrical automotive firm Lucid Motors, requesting paperwork associated to its projections and disclosures. Lordstown Motors is beneath investigation by federal prosecutors, whereas Nikola was discovered to have faked a prototype of its electrical truck.

“On the subject of product testing or the infrastructure manufacturing provide chain, all of that’s each day enterprise for us and has been for over 100 years, and I feel that could be a massive differentiator from these firms that haven’t performed this earlier than,” Zeitz stated, referring to newer electric-vehicle makers.

The transfer to separate Harley’s electrical automobile enterprise is a change in technique for the motorbike maker, which has saved the LiveWire model in home for a decade. Harley had deliberate to take a position $190m to $250m a yr to develop and produce electrical bikes.

The deal will probably be funded via $400m raised by the AEA Bridges Spac in September 2020, $100m funding from Harley and $100m in financing from Taiwanese motorbike producer Kymco, which can make a so-called non-public funding in public fairness, or Pipe.

Harley will personal 74 per cent of LiveWire, with 12 per cent held by the Spac shareholders and the remaining by the Spac founders and Kymco.

Zeitz stated that whereas the recent capital from the providing is welcome, that was not the pressure driving the deal.

“We have now lots of capital, so capital just isn’t the difficulty [for splitting off LiveWire],” he stated.

Shares within the AEA Bridges Affect Spac rose 2.5 per cent on Monday. The mixed firm will commerce on the New York Inventory Change beneath the ticker ‘LVW’.

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Written by colin


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