On December 18th, NIO announced on the Hong Kong Stock Exchange that it had signed a new round of share subscription agreement with Abu Dhabi investment firm CYVN Holdings (hereinafter referred to as "CYVN"). CYVN Holdings will make a strategic investment of approximately $2.2 billion in cash to NIO through its subsidiary CYVN Investments. According to the share subscription agreement, CYVN will subscribe for 294 million newly issued Class A common shares of the company at a purchase price of $7.50 per share.
As of the close of the previous trading day (December 15th), NIO US stocks closed at $7.98, with a market value of $14.144 billion; As of the reporter's press release, NIO's US stock was trading at $8.83, up 10.65%.
This is CYVN's second investment in NIO. CYVN is an investment institution with a majority stake in the Abu Dhabi government of the United Arab Emirates, with a strategic focus on the intelligent transportation industry. The fund was established in 2022 with the goal of investing in global industry leaders in this field.
In July 2023, NIO received a strategic equity investment of $738.5 million from CYVN Holdings. In addition, CYVN purchased several A-class common shares of NIO from an affiliate of Tencent Holdings Limited for a total consideration of $350 million. CYVN completed a strategic investment of approximately $1.1 billion in NIO in July through targeted issuance of new shares and transfer of old shares.
The announcement shows that after the investment transaction in December is completed, CYVN will beneficially hold about 20.1% of the total issued and outstanding shares of NIO, becoming the largest shareholder of NIO; At the time of investment transaction delivery in December, CYVN will have the right to nominate two directors to NIO's board of directors, provided that CYVN continues to beneficially own no less than 15% of NIO's outstanding share capital; If CYVN beneficially owns less than 15% but more than 5% of NIO's outstanding share capital, it will have the right to nominate a director to NIO's board of directors.
NIO stated that the NIO stocks held by CYVN are Class A common stocks with 1:1 voting rights; Li Bin, the Chairman and CEO of NIO, holds Class C equity with a 1:8 super voting right. After CYVN became the largest shareholder, the actual controller of the company remains Li Bin.
Currently, NIO is still operating at a loss. The third quarter financial report showed that NIO's total revenue was 19.07 billion yuan, a month on month increase of 117.4% and a year-on-year increase of 46.6%. However, its net loss remained at 4.557 billion yuan, a decrease of 24.8% and a year-on-year increase of 10.8%.
As of September 30th this year, NIO's cash and cash equivalents, restricted cash, short-term investments, and long-term fixed deposits amounted to RMB 45.2 billion, an increase of RMB 13.7 billion from the previous quarter. In addition to the strategic equity investment of CYVN Holdings, NIO successfully issued a total of $1.15 billion in convertible senior bonds in September and October, which enhanced NIO's cash reserves.
Since the beginning of this year, multiple overseas entities have invested in new Chinese automakers. In addition to the cooperation between NIO and CYVN, Stellantis N.V. (hereinafter referred to as "Stellantis") completed the delivery of investment in Lingpao Automobile in late November, and Stellantis Group acquired about 20% equity of Lingpao Automobile for 15 euros; Volkswagen acquired a 4.99% stake in Xiaopeng Motors for approximately $705.6 million.