(Yicai) Sept. 26 -- Nio has refuted a Bloomberg report claiming the Chinese new energy vehicle startup is planning to raise USD3 billion.
It is not true that Nio plans to raise USD3 billion from investors, the Shanghai-based company told Yicai yesterday.
Nio is considering raising around USD3 billion from investors, as questions swirl around the Chinese electric carmaker’s health amid mounting losses, Bloomberg reported yesterday, citing people familiar with the matter. Nio approached investors from the Middle East, the sources said, with one mentioning that the fundraiser could happen as soon as next year.
Nio’s New York-listed shares [NYSE: NIO] closed 2.1 percent down at USD8.35 yesterday. In Hong Kong, Nio [HKG: 9866] was trading down 0.2 percent at HKD65.20 (USD8.34) as of 11.30 a.m. today.
In the past six months, Nio received several financing. On July 12, the carmaker said it received a strategic equity investment of USD738.5 million from CYVN Investments RSC, an Abu Dhabi-based investment institution. Later that month, Nio issued CNY859 million (USD117.5 million) worth of asset-backed securities on the Shanghai Stock Exchange.
Moreover, Nio announced on Sept. 19 that it intends to issue convertible senior bonds with an aggregate principal amount of USD1 billion, half maturing in 2029 and half in 2030.
Nio’s stock price is low, as market participants believe that a tight cash flow is bad for investors, a hedge fund manager told Yicai, adding that being optimistic, Nio may be using funds to promote its business.
Nio reported a net loss of CNY10.9 billion (USD1.5 billion) in the first half of the year, widening 139 percent from a year earlier. As of June 30, the company’s cash and cash equivalents stood at CNY13.7 billion, down CNY6.2 billion (USD848.1 million) from the end of last year. Its significant cash requirements due within one year totaled CNY19.7 billion.
Despite the financial pressure, Nio is still investing heavily in innovative businesses, such as smartphones and batteries. The firm plans to make earphones and smartwatches as well. Nio’s quarterly investment in research and development accounts for 20 percent of its revenue, which is affordable for the company, Chief Executive Officer Li Bin said at the recent 2023 Nio Innovation and Technology Day.
Editor: Futura Costaglione