The Chinese electric car manufacturer Nio has secured an investment package of almost $1.1 billion. The fresh capital comes from the Abu Dhabi government fund CYVN Holdings.
The latter will acquire about 84.7 million newly issued ordinary shares worth $738.5 million. The price per share is therefore $8.72. The deal is expected to close in early July.
In addition, CYVN Holdings has entered into a purchase agreement with an affiliate of Tencent, an existing Nio shareholder, for approximately 40.1 million Nio shares valued at roughly $350 million. Upon completion of the two deals, CYVN Holdings will hold around seven per cent of Nio. In addition to the financial transaction, the two sides intend to “jointly pursue opportunities in Nio’s international business”.
Losses have marked Nio’s stock market performance in recent times. The company’s shares have been losing value for two and a half years. According to CN EV Post, NIO’s shares fell 85 per cent since the beginning of 2021. And the company’s financials are currently in the red: in the first quarter of 2023, revenue was just under 10.7 billion yuan (€1.36 billion), up 7.7 per cent from the first quarter of 2022 and down 33.5 per cent from the fourth quarter of 2022. However, the net loss for Q1 2023 was around 4.7 billion yuan (€610 million). That is an increase of 165.9 per cent compared to the same period last year (but 18.1 per cent lower than the fourth quarter of 2022).
The first two months of the second quarter also speak against a trend reversal. On the contrary, Nio delivered only 6,658 vehicles in April and only 6,155 in May. Production of some models is currently at a standstill as they are being converted from the NT1.0 to the NT2.0 platform. As a result, Nio was unable to benefit from the EV market in China, which picked up again in May.
As of 31 March, Nio’s cash and cash equivalents, restricted cash, short-term investments and long-term time deposits amounted to 37.8 billion yuan. The investment by CYVN Holdings is expected to give Nio additional wiggle room.
“The strategic investments from CYVN Holdings demonstrate NIO’s unique values in the smart electric vehicle industry. The Investment Transaction will further strengthen our balance sheet to power our continuous endeavors in accelerating business growth, driving technological innovations and building long-term competitiveness,” says Chairman and Nio CEO William Bin Li. “In addition, we are excited about the prospect of partnering with CYVN Holdings to expand our international business. With the vision of Blue Sky Coming, we will continue to strive for technological breakthroughs and user experiences beyond expectations, contributing to a more sustainable future for the globe.”
nio.com, cnevpost.com
Keyword: CYVN Holdings invests 1.1 billion dollars in Nio