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Nio's History Of Capital Raises: A Look At The Chinese EV Manufacturer's Debt

Chinese electric vehicle maker Nio Inc – ADR (NYSE: NIO) has been frequenting the debt market of late, with the $235-million private placement announced Thursday only the latest.

Benzinga · 03/06/2020 17:23

Chinese electric vehicle maker Nio Inc – ADR (NYSE: NIO) has been frequenting the debt market of late, with the $235-million private placement announced Thursday only the latest.

Nio's Strained Cash Position

Nio's latest financial report released in late December revealed a cash balance of $274.3 million as of Sept. 30, 2019. That figure is a fraction of the cash pile of its larger rival Tesla Inc (NASDAQ: TSLA), which boasted $6.3 billon at the end of 2019, or roughly 23 times that of Nio.

Legacy automakers such as General Motors Company (NYSE: GM) and Ford Motor Company (NYSE: F) are also awash with cash, with the former's automotive business ending 2019 with a cash balance of $13.41 billion and the latter's with $8.44 billion, excluding cash reserves at the Ford Credit business.

Nio's Fundraising Rounds 

Nio has cumulatively raised about $4.3 billion over eight rounds of funding, according to Crunchbase.

After four round of pre-IPO fundings — a Series A,B, C and D — from 2015 through 2017, Nio went public Sept. 12, 2018, offering 160 million ADRs at $6.25 apiece and raising $1 billion in the process.

Subsequently, the company raised capital through debt offerings.

  • January 2019: Nio raised $650 million through a convertible senior note offering due 2024. 
  • September 2019: Nio privately placed $200 million in convertible notes that were subscribed to by early investor TENCENT HOLDING/ADR (OTC: TCEHY) and Nio Chairman and CEO William Li. 
  • Feb. 6, 2020: Nio announced two private placements of short-term convertible notes with a principal aggregate amount of $100 million. 
  • Feb. 14, 2020: Nio announced an additional $100 million in private placements of short-term convertible notes.
  • March 5, 2020: Nio announced a $235-million private placement of short-term convertible notes.

The company signed a cooperation framework agreement in February with Hefei City to raise  10 billion yuan ($1.42 billion).

Nio Price Action 

Nio shares were falling 4.97% to $3.54 at the time of publication Friday. 

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Photo courtesy of Nio.