Nio’s shares advanced after announcing that CYVN Holdings, an investment firm focused on smart travel backed by the Abu Dhabi government, plans to invest USD2.2 billion to almost triple its shareholding ratio in the Chinese new energy vehicle startup.
Nio [HKG: 9866] was trading up 4.7 percent at HKD64.35 (USD8.25) as of lunch break in Hong Kong today. Its New York-listed stock [NYSE: NIO] closed 4.6 percent up at USD8.35 yesterday.
CYVN will subscribe 294 million Class-A common shares of Nio for USD7.50 apiece, the Shanghai-based company said in a statement yesterday. With the transaction, CYVN will raise its stake in Nio to 20.1 percent from 7 percent, becoming the carmaker’s largest shareholder.
Nio announced in June that CYVN will buy nearly 84.7 million Class A ordinary shares of the company for USD8.72 apiece in a private placement and another 40.1 million from Chinese tech giant Tencent Holdings for a total of USD1.1 billion, giving the investor a 7 percent stake.
“Our increased investment in Nio represents a continuation of our ongoing strategy to build a leading global portfolio in the mobility space,” said Jassem Al Zaabi, chairman and managing director of CYVN. “This transaction demonstrates our confidence in Nio’s unique positioning and competitiveness in the global smart electric vehicle industry.
“We are excited to be a long-term strategic partner of Nio and support its efforts in product innovation, technological breakthroughs and international market expansion,” Al Zaabi noted.
Nevertheless, CYVN’s shares are Class-A, meaning that each of them has only one voting right. Meanwhile, Nio’s founder, Chairman, and Chief Executive William Li owns Class C shares, each with eight voting rights. Therefore, after CYVN’s stake increase, Li will remain Nio’s actual controller.
“With the enhanced balance sheet, Nio is well prepared to sharpen brand positioning, bolster sales and service capabilities, and make long-term investment in core technologies to navigate the intensifying competitive landscape, while continually improving execution efficiency and system capabilities,” Li said.
In the third quarter, Nio achieved business revenue of CNY19.1 billion (USD2.7 billion), up 47 percent from a year earlier, but suffered a net loss of CNY4.6 billion (USD644 million), up 11 percent in the period.
