SWVL Announces $2 Million Private Placement Priced At-the-Market Under Nasdaq Rules

Rhea-AI Summary

Swvl Holdings (Nasdaq: SWVL) has announced a $2 million private placement of pre-funded warrants to purchase ordinary shares at $4.79 per share. This follows their previous $4.7 million placement in November 2024. The purchasers agreed to a 6-month lock-up period and subsequent trading restrictions limiting transfers to 20% per 90-day period.

The company plans to use the proceeds for working capital and expanding operations in the United States. This placement follows recent developments including securing multiple million-dollar contracts across Egypt, Saudi Arabia, and UAE, obtaining HSBC financing, and preparing for expansion in the US and GCC regions.

The offering is made under Section 4(a)(2) of the Securities Act and/or Regulation D, restricting the sale of securities in the US except through registration or applicable exemptions.

Positive

• Secured additional $2 million in funding through private placement
• 6-month lock-up period and trading restrictions indicate investor confidence
• Recently secured multiple million-dollar contracts in Egypt, Saudi Arabia, and UAE
• Obtained HSBC financing for current and new sales pipeline

Negative

• Continued reliance on private placements for funding may indicate cash flow challenges
• Potential dilution of existing shareholders through warrant exercise

Insights

Financial Analyst

The $2 million private placement at $4.79 per share represents a strategic financing move with several noteworthy aspects. The pricing near market value, coupled with stringent lock-up provisions (6-month complete lock-up followed by volume-restricted sales), suggests strong investor conviction in SWVL's fundamentals and reduces immediate dilution concerns.

The structured selling restrictions, limiting transfers to 20% per 90-day period and capping daily sales at 20% of trading volume, create a controlled exit mechanism that should minimize market impact. This thoughtful approach to managing potential selling pressure demonstrates sophisticated financial engineering that balances investor flexibility with market stability.

This placement, combined with the previous $4.7 million raise, brings total recent funding to $6.7 million. The timing aligns with SWVL's expansion strategy, particularly in securing contracts across the GCC region and planned US market penetration. The HSBC financing facility further strengthens the company's working capital position, creating a multi-layered funding approach that reduces dependency on any single source.

The use of pre-funded warrants rather than direct equity indicates careful consideration of capital structure impacts. This instrument choice provides immediate funding while potentially offering more favorable accounting treatment and flexibility in timing of share issuance.

The focus on US expansion represents a pivotal strategic shift, potentially opening access to larger market opportunities and deeper capital markets. However, investors should monitor execution risks in this new market entry, particularly given the competitive landscape and regulatory requirements in the US mobility sector.

DUBAI, United Arab Emirates, Feb. 10, 2025 (GLOBE NEWSWIRE) -- Swvl Holdings Corp ("Swvl" or the "Company") (Nasdaq: SWVL), a leading provider of technology-driven mobility solutions for enterprises and governments, today announced that investors have exercised their right to purchase additional securities pursuant to the previously executed definitive agreement dated November 17, 2024, to purchase $2 million of pre-funded warrants to purchase ordinary shares in a private placement, at a purchase price of $4.79 per share. The purchasers have agreed to lock up the securities purchased in the offering for a period of 6 months, and also to transfer less than 20 percent of the securities purchased for each 90-day period thereafter in an amount not more than 20 percent of the trading volume on the date of sale.

Swvl believes that the execution of the lock up agreements, and selling restrictions contained therein, indicates the purchaser’s confidence in Swvl’s long-term growth strategy. The private placement closed on February 7, 2025. The Company intends to use the net proceeds from the private placement for working capital and general corporate purposes, including the expansion of its operations in the United States.

The private placement comes on the back of Swvl’s recent developments, including securing multiple million dollar contracts across Egypt, Saudi Arabia and the United Arab Emirates, obtaining financing from HSBC to fund current and new sales pipeline, and in Swvl’s announced preparation to accelerate its growth and footprint in the United States and in the GCC. This investment comes as an extension to the previously announced $4.7 million private placement in November 2024.

The offering is being made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and/or Regulation D thereunder. Accordingly, the securities issued in the offering may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Swvl

Swvl is a leading provider of technology-driven mobility solutions for enterprises and governments. Swvl's technology enhances transit system efficiency to deliver safer, more reliable, and sustainable transportation solutions.

Forward-Looking Statements

This press release contains “forward-looking statements'' relating to future events. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding future events and other statements that are not historical facts. For example, Swvl is using forward looking statements when it discusses the expected use of proceeds. These statements are based on the current expectations of Swvl’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Swvl. These statements are subject to a number of risks and uncertainties regarding Swvl’s business, and actual results may differ materially. In addition, forward-looking statements provide Swvl’s expectations, plans or forecasts of future events and views as of the date of this communication. Swvl anticipates that subsequent events and developments could cause Swvl’s assessments and projections to change. However, while Swvl may elect to update these forward-looking statements in the future, Swvl specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Swvl’s assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon any forward-looking statements. Except as otherwise required by law, Swvl undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. More detailed information about the risks and uncertainties affecting the Company is contained under the heading “Risk Factors” in the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (the “SEC”), which is available on the SEC’s website, www.sec.gov, and in subsequent SEC filings.

Contact: Investor.relations@swvl.com

FAQ

What is the price per share for SWVL's February 2025 private placement?

The private placement was priced at $4.79 per share for pre-funded warrants.

How much did SWVL raise in their February 2025 private placement?

SWVL raised $2 million through the private placement of pre-funded warrants.

What are the lock-up terms for SWVL's February 2025 private placement?

Investors agreed to a 6-month lock-up period, followed by restrictions limiting transfers to 20% per 90-day period.

How will SWVL use the proceeds from the February 2025 private placement?

SWVL plans to use the proceeds for working capital and general corporate purposes, including expansion of operations in the United States.

What was the total amount raised by SWVL in private placements since November 2024?

SWVL raised a total of $6.7 million through private placements, combining the $4.7 million in November 2024 and $2 million in February 2025.