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NIO raises USD 200 mln from Tencent via convertible bonds

CKN
minutes 2019/09/09 09:27:46
1,789
Nio, Tecent, New Energy Vehicle

Sep 09, 2019 (China Knowledge) - NYSE-listed Chinese electric vehicle maker NIO (NIO) is raising new cash of USD 200 mln via convertible bonds from Tencent (0700.HK). Nio has been hit by flagging sales and a massive recall this year. And the major investor Tencent will provide a much-needed boost for NIO to help with finances during an acute cash-flow crunch.

NIO will issue USD 200 mln in convertible notes to a Tencent’s affiliate as well as NIO CEO Li Bin. The notes will be split into two equal tranches, and both the Tencent’s affiliate and Lin Bin will subscribe for USD 100 mln principal amount.

The first tranche has no interest and it will mature in 360 days. Fifteen days before maturity, subscribers may choose to convert the bonds into NIO's American Depositary Shares (ADS) at a price of USD2.98 each. The second tranche will mature in three years and will be convertible into stock at USD 3.12 per ADS.

When the news was announced NIO’s share prices surged 7.27% to USD 2.95 the next day. The subscription from Tencent and Li show to the shareholders both are confident in the future performance of the company.

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