Nio Inc (NYSE: NIO) has announced plans to raise about $1 billion through a new share offering to fund research and development projects, as well as strengthen its balance sheet. The company intends to issue up to 181,818,190 class A ordinary shares, including American Depositary Shares (ADS), with each ADS representing one class A ordinary share.
The allocation of the shares will be based on investor interest, and Nio has granted the underwriters a 30-day option to purchase up to 27,272,729 additional ADSs. At Nio’s Tuesday closing price of $6.28, the offering is expected to raise at least $1.1 billion, with a potential for an additional $170 million if the underwriters exercise their option.
The proceeds from the offering will be used to invest in research and development for electric vehicle core technologies, develop future technology platforms and vehicle models, expand the battery swap and charging network, strengthen the balance sheet, and for general corporate purposes. Morgan Stanley Asia Limited, UBS Securities LLC, UBS AG Hong Kong Branch, and Deutsche Bank AG, Hong Kong Branch are acting as representatives for the underwriters.
Following the announcement of the new share offering, Nio’s stock plunged by about 10% in premarket trading in the US. The company’s statement regarding the Equity Offering outlines its plans to use the net proceeds for various strategic initiatives, including research and development, network expansion, and strengthening its balance sheet.
The ADSs and Class A ordinary shares will be offered under the company’s shelf registration statement on Form F-3, which was filed with the Securities and Exchange Commission (SEC) and became effective in May 2024. A preliminary prospectus supplement related to the offering has been filed with the SEC, and interested parties can access the registration statement and prospectus supplement on the SEC website.
This press release serves as information about the pending offering of the company’s securities, and there is no guarantee that the Equity Offering will be completed. Investors are advised to refer to the official documentation for detailed information on the offering.
In related news, trading of Nio shares in Singapore has been suspended at the request of Nio CFO Stanley Qu. The reason for the suspension has not been disclosed, but it is likely related to the company’s recent announcement of the new share offering. Stay tuned for updates on this developing story.
