SunCar Technology Group Announces Follow-On Public Offering

Rhea-AI Summary

SunCar Technology Group Inc. (Nasdaq: SDA), a Chinese cloud-based B2B auto services and auto e-insurance provider, has announced a firm commitment underwritten follow-on public offering of up to $50 million of Class A Ordinary Shares. The company will grant underwriters a 30-day option to purchase up to an additional $7.5 million of shares.

The offering is being led by BTIG, as the lead book-running manager, with Macquarie Capital and Oppenheimer & Co. Inc. serving as joint bookrunners. The proceeds will be used for working capital and general corporate purposes. The offering is subject to market conditions and will be conducted under an effective shelf registration statement previously filed with the SEC on June 3, 2024.

Positive

• Secured up to $57.5M potential capital raise through follow-on offering
• Strong underwriting support from major financial institutions

Negative

• Potential dilution of existing shareholders' value
• Offering subject to market conditions with no guaranteed completion

Insights

Investment Banking Analyst

This $50 million follow-on offering represents a significant capital raising event for SunCar Technology Group, accounting for approximately 4.8% of their current market capitalization. The timing and size of this offering warrant careful consideration:

The structure as a firm commitment underwritten offering, backed by prestigious institutions like BTIG, Macquarie and Oppenheimer, suggests strong institutional interest despite current market volatility. However, investors should note that this will likely result in dilution of existing shareholdings.

Several key implications emerge from this announcement:

• The company's decision to raise capital through equity rather than debt indicates a strategic preference for maintaining balance sheet flexibility, though at the cost of dilution
• The broad designation of proceeds for "working capital and general corporate purposes" provides visibility into specific use of funds, which may concern some investors
• The 30-day option for underwriters to purchase an additional $7.5 million in shares (15% overallotment) could provide additional liquidity if market demand proves strong

From a market perspective, this offering comes at a time when Chinese tech companies face increased scrutiny and regulatory pressures. The successful execution of this offering could strengthen SunCar's competitive position in China's rapidly evolving auto services and e-insurance market, but investors should monitor the final pricing and allocation details carefully when announced.

NEW YORK, Feb. 4, 2025 /PRNewswire/ -- SunCar Technology Group Inc. ("SunCar") (Nasdaq: SDA), an innovative leader in cloud-based B2B auto services and auto e-insurance in China, today announced a firm commitment underwritten follow-on public offering of an aggregate of up to $50 million of Class A Ordinary Shares, par value $0.0001 per share (the "Class A Ordinary Shares"). In connection with the offering, SunCar intends to grant the underwriters a 30-day option to purchase an aggregate of up to $7.5 million additional Class A Ordinary Shares at the public offering price less the underwriting discount. The net proceeds from this offering will be used for working capital and general corporate purposes.

BTIG, LLC is acting as lead book-running manager for the offering, and Macquarie Capital Limited and Oppenheimer & Co. Inc. are acting as joint bookrunners. The closing of the proposed offering is subject to market and other conditions and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the proposed offering.

The securities described are being offered by SunCar pursuant to an effective shelf registration statement on Form F-3 (No. 333-279916) that was previously filed with the Securities and Exchange Commission (the "SEC") on June 3, 2024 and declared effective by the SEC on June 14, 2024. A preliminary prospectus supplement and accompanying prospectus relating to and describing the terms of the proposed offering will be filed with the SEC.

Before you invest, you should read the preliminary prospectus supplement and the accompanying prospectus in that registration statement and other documents filed with the SEC for more information about SunCar and this offering. You may obtain these documents free of charge by visiting the SEC's website at www.sec.gov. When available, copies of the preliminary prospectus and the accompanying prospectus relating to the securities being offered may also be obtained from BTIG, LLC, Attention: ECM, General Counsel, 65 East 55^th Street, New York, New York 10022, by email at IBLegal@btig.com or by email at btig-ibd-equitycapitalmarkets@btig.com; or Macquarie Capital Limited, Attention: MacCap US-Asia ECM Execution, Level 22, One International Finance Centre 1 Harbour View Street, Central Hong Kong, by email at: maccap.usasiaecmexecution@macquarie.com; or Oppenheimer & Co. Inc. Attention: Syndicate Prospectus Department, 85 Broad Street, 26^th Floor, New York, NY 10004, by email at EquityProspectus@opco.com.

This press release does not and shall not constitute an offer to sell or a solicitation of an offer to buy any of SunCar's Class A Ordinary Shares, nor shall there be any offer, solicitation or sale of such shares, in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About SunCar Technology Group Inc.

Founded in 2007, SunCar is transforming the customer journey for auto services and auto insurance in China, the largest passenger vehicle market in the world. SunCar develops and operates cloud-based platforms that seamlessly connect drivers with a wide range of auto services and insurance coverage options through a nationwide network of sales partners. As a result, SunCar has established itself as the leader in China in the B2B auto services market and the auto eInsurance market for electric vehicles. SunCar's intelligent cloud platform empowers its enterprise clients to access and manage their customer database and offerings optimally, and drivers gain access to hundreds of services from tens of thousands of independent providers in a single application. For more information, please visit: https://suncartech.com.

Cautionary Language Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements regarding the offering and the anticipated use of the net proceeds from the offering, are forward-looking statements. These forward-looking statements are made as of the date they were first issued and are based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond SunCar's control. SunCar's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including, but not limited to, the risks related to the offering of the shares and uncertainties related to market conditions. These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed in SunCar's filings and reports with the SEC, including the Annual Report on Form 20-F for the fiscal year ended December 31, 2023, as well as other filings and reports that are filed by SunCar from time to time with the SEC. SunCar anticipates that subsequent events and developments will cause its views to change and you should consider these factors in evaluating the forward-looking statements and not place undue reliance on such statements. SunCar undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing SunCar's views as of any date subsequent to the date of this press release.

Contact Information:

SunCar:

Investor Relations: Ms. Hui Jiang
Email: IR@suncartech.com
Legal: Ms. Li Chen
Email: chenli@suncartech.com

U.S. Investor Relations:

Matthew Abenante, IRC
President
Strategic Investor Relations, LLC
Tel: 347-947-2093
Email: matthew@strategic-ir.com

 

View original content:https://www.prnewswire.com/news-releases/suncar-technology-group-announces--follow-on-public-offering-302368058.html

SOURCE SunCar Technology Group Inc.

FAQ

What is the size of SunCar Technology's (SDA) follow-on public offering announced in February 2024?

SunCar Technology announced a follow-on public offering of up to $50 million of Class A Ordinary Shares, with an additional $7.5 million option for underwriters, totaling potential proceeds of $57.5 million.

How will SunCar Technology (SDA) use the proceeds from its 2024 public offering?

SunCar Technology plans to use the net proceeds from the offering for working capital and general corporate purposes.

Who are the underwriters for SunCar Technology's (SDA) 2024 follow-on offering?

BTIG, is the lead book-running manager, with Macquarie Capital and Oppenheimer & Co. Inc. acting as joint bookrunners for the offering.

When was SunCar Technology's (SDA) shelf registration statement declared effective by the SEC?

SunCar's shelf registration statement on Form F-3 was declared effective by the SEC on June 14, 2024.