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Monday, May 20, 2024

NIO secures $740 million investment from Abu Dhabi government fund


Chinese electric car maker NIO has confirmed that a holding company backed by the Abu Dhabi government is investing nearly $740 million in exchange for new Class A shares in the company. As a new minority shareholder, NIO The aim is to jointly seek new global business opportunities and accelerate growth in new markets outside of China.

NIO ($weilai) China remains one of the leading EV innovators in its homeland and, like many of its rivals, has ventured into new markets such as Europe to capture a bigger piece of the growing global market.

We’ve already seen the automaker ship its range of electric vehicles to new markets in Germany, Norway and Denmark, Comes with a battery swap station to support its new customers.Also, we see NIO teasing plans to A new EV sub-brand Come to Europe.

Historically, automakers have been developing and implementing Innovative battery technology With the help of space monsters like CATL. NIO CEO William Lee has spoken candidly about the company’s goals in the past Becoming a top five automaker by sales by 2030, including an internal plan to enter the US market by 2025.

As NIO looks to expand further into a globally recognized EV brand, it needs financial calm to strengthen its balance sheet and ensure it has enough money to support such ambitious growth this decade. With the help of Abu Dhabi government funds, NIO appears to have found the cash it was seeking in exchange for a minority stake in the new company’s shares.

NIO-ET5-Travel Edition
NIO’s new ET5 Touring / Source: NIO Inc.

NIO issues common shares to Abu Dhabi fund for $740 million

NIO shared it Signed up for a new stock subscription Today, Abu Dhabi investment company CYVN Holdings exchanged US$738.5 million in cash for 84,695,543 Class A ordinary shares of NIO at an acquisition price of US$8.72 per share.

CYVN Holdings, an investment company controlled by the Government of Abu Dhabi, is focused on “deploying capital in smart and advanced mobility solutions to create value and accelerate the transition to a more sustainable future.”

In addition, NIO also said that the Abu Dhabi-owned fund is also entering into a share purchase agreement with an affiliate of Tencent (NIO’s existing NIO shareholder) to purchase an additional 40,137,614 of NIO’s Class A ordinary shares. If approved, Abu Dhabi’s CYVN Holdings would own about 7% of NIO’s total issued and outstanding shares. Li Bin, founder and CEO of NIO, made a speech:

The strategic investment of CYVN Holdings demonstrates the unique value of NIO in the smart electric vehicle industry. The investment transaction will further strengthen our balance sheet and provide momentum to our continued efforts to accelerate business growth, drive technological innovation and build long-term competitiveness. Additionally, we are excited about the prospect of partnering with CYVN Holdings to expand our business internationally. With the vision of “blue sky is coming”, we will continue to pursue technological breakthroughs and user experiences that exceed expectations, and contribute to a more sustainable future for the world.

For reference, NIO means “new day,” but its Chinese name, Wei Lai, means blue sky coming, which is what Li mentioned above.

Following approval of the new investment, NIO said it would have the right to nominate a director to the board as long as CYVN Holdings continues to beneficially own at least 5% of the company’s issued share capital. The Abu Dhabi-backed fund also agreed not to sell, transfer or dispose of any NIO shares for at least six months after the deal closes.

The pending stock transaction is subject to customary closing conditions and is expected to close in early July.

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