Nio enters into US$738.5 million private placement with Abu Dhabi state investor

ELECTRIC vehicle maker Nio : NIO 0% has entered into a share subscription agreement with an investment vehicle majority owned by the Abu Dhabi government, with the investor to become a substantial shareholder and be entitled to a board seat.

In the transaction, CYVN Holdings will invest US$738.5 million in cash to subscribe to about 84.7 million newly-issued Class A ordinary shares of Nio at US$8.72 apiece, the China-based automaker said on Tuesday (Jun 20) in a regulatory filing to the Singapore Exchange (SGX), where it is listed.

The share subscription price was the volume weighted average price of Nio’s Class A ordinary shares on the New York Stock Exchange – where the automaker also has a listing – over the seven consecutive trading days preceding Monday.

The transaction is subject to customary closing conditions and the closing is expected to take place in early July 2023. CYVN has agreed not to sell or transfer any of these shares for six months after the closing.

Separately, the investor has entered into a share purchase agreement with an existing shareholder, an affiliate of Chinese technology behemoth Tencent, to purchase 40.1 million of Nio’s Class A ordinary shares.

When both share transactions have been completed, the investor will own about 7 per cent of Nio’s total issued and outstanding shares, entitling it to nominate a director to the automaker’s board.

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In addition, Nio and CYVN will jointly pursue opportunities in the automaker’s international business after the private placement has been completed.

Nio shares on SGX closed 4.5 per cent lower at US$8.96 on Tuesday, before the announcement.