At the end of February, Li's stake in Nio was 10.5 percent, with 44.2 percent of the voting rights. CYVN will hold a 20.1 percent stake in Nio after its latest investment.
(Nio founder, chairman, and CEO William Li speaks at the April 2023 Shanghai auto show. Image credit: CnEVPost)
Nio (NYSE: NIO) announced yesterday that it has secured a new round of funding from Abu Dhabi government fund CYVN Holdings LLC.
This will bring significant changes to the Chinese electric vehicle (EV) maker's shareholding structure, although its founder, chairman and CEO William Li will remain the company's de facto controller through a special voting arrangement.
CYVN Holdings will invest a total of $2.2 billion in cash to subscribe for 294 million of Nio's newly issued class A ordinary shares at a price of $7.50 per share, according to a statement from Nio yesterday.
The Middle Eastern investor closed a roughly $1.1 billion investment in Nio in July, when it received about 7 percent, or 125 million shares, as well as the right to nominate a director.
The latest deal, which is expected to close in the last week of December, will see CYVN own 419 million, or about 20.1 percent of Nio's total issued and outstanding shares, as well as the right to nominate two directors to Nio's board.
After CYVN becomes Nio's top shareholder, the company's de facto controller will remain Li, local media Yicai said in a report yesterday, citing a response from the company.
CYVN holds Nio shares as class A ordinary shares with 1:1 voting rights, while Li holds class C shares with 1:8 super voting rights.
As of February 28, 2023, Li held 30,467,776 shares of Nio's class A ordinary shares, and 148,500,000 shares of class C ordinary shares, according to Nio's 2022 annual report released in April.
Li's combined ownership of Nio was 10.5 percent, making him the largest shareholder with 44.2 percent of the voting rights.
(Screenshot from Nio's 2022 annual report.)
Nio's previous largest institutional shareholders were Tencent, with a 9.7 percent stake in the company and 5.9 percent voting rights, and Baillie Gifford & Co, with a 7.2 percent stake and 4.4 percent voting rights.
Nio's board of directors currently has seven members:
William Li, Qin Lihong, Denny Ting Bun Lee, James Gordon Mitchell, Long Yu and Wen Yonggang.
Li and Qin are the founders of Nio, and Mitchell is senior executive vice president and chief strategy officer of Tencent.
The other four are independent directors, Long was appointed in July 2021 and Wen was appointed just last month.
Nio secures new $2.2 billion investment from Abu Dhabi's CYVN
