Chinese electric vehicle maker Nio said today it entered into an agreement to purchase 3.305% of Nio China's stake for RMB 5.5 billion from two of the minority strategic investors that invested in Nio China in April 2020.
The EV maker also will subscribe for the newly increased registered capital of Nio China at a subscription price of RMB10.0 billion.
Upon the completion of the equity interest purchases and the capital subscription, Nio will hold an aggregate of 90.360% controlling equity interests in Nio China, it said.
In connection with the equity purchases and the capital subscription, the Nio China strategic investors have duly waived their applicable minority shareholder rights including pre-emptive rights, Nio said.
At the end of December 2019, Nio had only $124 million in cash, $706 million in assets, and $1.362 billion in liabilities.
Nio's funding to Beijing Yizhuang and Zhejiang Huzhou at the time did not come to fruition, and subsequent events such as the departure of its CFO hit investor confidence even harder.
In February 2020, Nio signed an agreement with the city of Hefei to ease cash flow problems.
On April 29, 2020, Nio signed a definitive agreement with strategic investors in Hefei regarding investment in Nio China and reached an agreement with the Hefei Economic and Technological Development Zone to locate Nio China's headquarters there.
The investment agreement shows that the strategic investors will invest RMB 7 billion in Nio China. Meanwhile, Nio invested RMB 4.26 billion in Nio China. This means that Nio China receives more than RMB 10 billion in cash flow.
In addition, Nio injected its core business and related assets in China, including vehicle development, supply chain and manufacturing, sales and services, and energy services into Nio (Anhui) Holdings Limited, Nio China's legal entity.
These businesses and assets are valued at RMB17.77 billion based on 85% of the average of Nio's market value over the 30 public trading days prior to April 21, 2020.
Upon completion of the transaction, Nio holds a 75.9% controlling stake in Nio China and the strategic investors hold a combined 24.1% stake.
China's new-energy vehicle sales have been in the peak season after that, and Nio has risen more than 10 times in 2020. Based on the RMB 7 billion investment made by the Anhui government, it has made a profit of RMB 44.8 billion.
(Source: cnEVpost)
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