(Reuters) – Abu Dhabi government-backed CYVN Holdings will invest about $738.5 million in Nio Inc to strengthen the company’s balance sheet, the Chinese electric car maker said on Tuesday.
NIO and peers Xpeng Motors and Li Auto are all vying for a bigger slice of the EV market in the world’s largest auto market dominated by BYD.
Under the agreement, NIO will issue approximately 85 million new Class A shares to CYVN Holdings at a price of $8.72 per share.
The news sent Nio’s U.S.-listed shares down about 1 percent to $9.30.
CYVN also has an agreement with an affiliate of Tencent Holdings, under which it will acquire a stake in Nio.
After the two deals, CYVN will own 7% of NIO, the electric car maker said, adding that the stake would give the investment firm the right to nominate a director to NIO. Board of Directors.
After the investment transaction is completed, Nio said it will jointly pursue global business opportunities with CYVN.
The electric carmaker’s first-quarter deliveries were up about 20% from 25,768 a year earlier.
Its cash and cash equivalents fell to 14.76 billion yuan ($2.15 billion) in the first three months of this year from 19.89 billion yuan at the end of the fourth quarter of 2022.
(Reporting by Akash Sriram and Tanya Jain in Bengaluru; Editing by Shailesh Kuber)