NIO Announces $100 Million Short-term Debt Financing

Chinese electric vehicle (EV) manufacturer NIO announced a $100 million short-term debt offering on Thursday and said it’s “currently working on several other financing projects.”

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The EV maker stated that it has entered into definitive transaction documents with an unaffiliated Asia-based investment fund through a private placement, which will allow the company to issue and sell $70 million worth of convertible notes.

The closing of this placement is subject to satisfaction of customary closing conditions and is expected to occur on or around February 10, 2020, NIO said.

In addition, the company also completed another convertible notes private placement in January to another unaffiliated Asia-based investment fund on similar terms, adding around $30 million worth of convertible notes to an aggregate principal amount of $100 million.

It’s worth noting that both investors are unaffiliated with NIO, which make them pure financial investors. This also means the EV startup’s investment value is recognized by the capital market.

Earlier this year, it was reported that NIO would receive an investment of about $1 billion from GAC Group. But GAC later clarified that the two sides have discussed NIO’s financing plan, but negotiations remain at an early stage and no binding agreement has been reached.

The company has run into a cash crunch in 2019, and the debt offerings will definitely improve its liquidity. NIO also working on other financing projects, the outcome of which is uncertain at this stage.

In December 2019, NIO laid off another 141 employees at its North American headquarters in San Jose, following a strategic decision to reduce headcount.