Chinese electric vehicle maker Nio Inc – ADR (NYSE: NIO) announced a financing deal Thursday that could serve to alleviate its precarious liquidity position.
Shanghai-based Nio said it has entered into a definitive agreement with an unaffiliated Asia-based investment fund to sell convertible notes worth $70 million through a private placement.
The Bank of New York Mellon, London Branch will serve as the trustee, Nio said.
The company expects the private placement to close on or around Feb. 10 contingent on satisfaction of customary closing conditions.
Nio also said that it consummated another convertible note offering in January to another unaffiliated Asia-based investment fund on similar terms.
The aggregate proceeds from the two placements is around $100 million.
The notes, according to Nio, will bear zero interest and mature Feb. 4, 2021. The holders can convert the note six months from the issue date into ADSs at a price of $3.07 per ADS.
"The company is currently working on several other financing projects, the outcome of which is uncertain at this stage," Nio said in the release.
Even as the new Wuhan coronavirus scare threatens the fledgling recovery at Nio, it is facing a financing crunch. The company's cash position at the end of September 2019 stood at an anemic $274.3 million.
The stock was down 1.94% at $4.30 at the time of publication Thursday.
Photo courtesy of Nio.