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.
CYVN, which focuses on strategic investment in smart mobility, will also buy more than 40 million shares which are currently owned by an affiliate of Chinese technology firm Tencent.
“Upon the closing of the investment transaction and secondary share transfer, the investor will beneficially own approximately 7 per cent of the company’s total issued and outstanding shares,” Nio said in statement to the Hong Kong stock exchange.
“The investment is an endorsement of Nio’s status as a top EV maker in China although competition is escalating in the domestic market,” said Gao Shen, an independent analyst in Shanghai. “For Nio, fresh capital will enable it to stick to its growth strategy in the coming years.”
Nio, along with Beijing-headquartered Li Auto and Guangzhou-based Xpeng, is viewed as China’s best response to Tesla as they all assemble intelligent battery-powered vehicles, featuring autonomous driving technology and sophisticated in-car entertainment systems.
Tesla is now the runaway leader in the premium EV segment in mainland China, the world’s largest automotive and electric-car market.
Post time: Jun-26-2023
