NIO, which has become more financially solid, continues to buy back its previously ceded stake in NIO China from strategic investors, and its stake will rise to 92.114 percent after the latest move.
(Photo source: CnEVPost)
As NIO's financial position becomes more solid, the company also continues to buy back previously ceded stakes in NIO China from strategic investors.
NIO, through its wholly-owned subsidiary, today entered into a definitive agreement to increase its stake in NIO Holding Co Ltd (NIO China, previously known as NIO (Anhui) Holding Co Ltd), according to the company's SEC filing Friday.
Under the agreement, NIO will repurchase 1.418 percent of its shares from a minority strategic investor who invested in NIO China in April 2020, for RMB 2.5 billion.
NIO will also subscribe to the newly increased registered capital of NIO China for a subscription price of RMB 7.5 billion.
After these actions, NIO will hold a total of 92.114 percent controlling stake in NIO China.
"In connection with the Equity Interest Repurchases and the Capital Subscription, the NIO China Strategic Investors have duly waived their applicable minority shareholder rights, including pre-emptive rights," the document said.
At the end of April last year, NIO received RMB 7 billion investment from strategic investors in Anhui Province, which significantly eased its cash flow position.
Upon completion of this transaction, NIO held a 75.9 percent controlling stake in NIO China, and the strategic investors held a combined 24.1 percent stake.
In the following months, NIO's situation improved significantly.
On September 18 last year, NIO announced that it would repurchase 8.6 percent of NIO China for a total consideration of RMB 511.5 million. NIO also assumed a cash injection obligation of RMB 2 billion upon completion of the redemption.
After the completion of the repurchase at that time, NIO held a total of 84.5 percent controlling interests in NIO China.
On February 4 this year, NIO said it would repurchase 3.305 percent of NIO China from two strategic investors of NIO China for RMB 5.5 billion, and would also increase its stake in NIO China by RMB 10 billion.
After these moves, NIO held 90.360 percent of NIO China.