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EV maker Nio builds financial muscle with stake sale to Abu Dhabi state firm
By Jerry
- Abu Dhabi government-owned CYVN will buy 84.7 million newly-issued shares in Nio at US$8.72 apiece, in addition to an acquisition of a stake owned by Tencent’s unit
- The aggregate holding of CYVN in Nio would rise to around 7 per cent following the two deals
Chinese electric vehicle (EV) builder Nio will receive US$738.5 million in fresh capital injection from an Abu Dhabi government-backed firm CYVN Holdings as the company beefs up its balance sheet at a time of a bruising price war in the industry which has seen price-sensitive investors migrating to cheaper models.
The first time investor CYVN will buy 84.7 million newly-issued shares in the company at US$8.72 apiece, representing a 6.7 per cent discount to its closing price on the New York Stock Exchange, Shanghai-based Nio said in a statement late on Tuesday. The news sent Nio’s stock soaring by as much as 6.1 per cent on the Hong Kong stock exchange in a weak market.
The investment “will further strengthen our balance sheet to power our continuous endeavours in accelerating business growth, driving technological innovations and building long-term competitiveness,” William Li, co-founder and chief executive of Nio said in the statement. “In addition, we are excited about the prospect of partnering with CYVN Holdings to expand our international business.”
The company added that the deal would be closed in early July.
