The strategic investment provides the fund, CYVN Holdings, with 7% ownership in Nio. The deal was priced at $8.72 a share, a release stated.
That’s 6.7% below where Nio’s U.S.-listed shares closed on Tuesday, which is down by about half a percent.
However, earlier this month, Nio said uninspired car deliveries are affecting potential cash flow, which has been the reason behind delaying capital expenditure and some research and development projects.
The corporation stated at the time that it had adequate funds to run its operations. Nio disclosed 14.76 billion yuan ($2.07 billion) in cash and cash equivalents as of March, which was less than what the company disclosed for the end of 2021 and 2022.
Moreover, at the end of 2019, the EV car company’s cash and cash equivalents had downshifted below $1 billion. But Nio made a comeback in 2020 after receiving about $1 billion from investors, which typically include state-backed organisations.
Middle Eastern interest in China
In recent months, Middle Eastern investors have become increasingly interested in potential in China, particularly in electric vehicles.
As investors from the United States and other regions become wary of China due to regulatory uncertainties, China-based funds have turned to the Middle East for funding.
The corporation said it anticipates the deal with the Abu Dhabi fund to close in early July, after which they plan to “pursue opportunities in Nio’s international business.”
The agreement also gives CYVN the right to designate a director to Nio’s board, the announcement said.
- Published By Team Genuine Reporter