Running Low on Cash, Chinese Electric Vehicle Maker NIO Makes a $235 Million Deal
Chinese electric vehicle maker NIO (NYSE:NIO) said that it will raise $235 million by issuing
Chinese electric vehicle maker NIO (NYSE:NIO) said that it will raise $235 million by issuing short-term notes that convert into stock to several un-named Asian investment funds. The deal will close by Feb. 11, the company said.
NIO raised $100 million in a similar fashion in early February. At the time, investors questioned whether NIO was raising funds in order to meet its monthly payroll, which had been postponed by a week.
The electric vehicle maker, which has seen sales slip as China grapples with the novel coronavirus, said late last month that it’s working to close a longer-term financing deal with a city government.
That deal, with the city of Hefei, in eastern China, would see NIO relocate its headquarters and manufacturing to the city in exchange for an investment of at least 10 billion yuan ($1.4 billion), enough to keep NIO funded for at least several more quarters.
Hefei is the capital of Anhui Province, in eastern China, and is known as a center of scientific and industrial research. Its population is about 8 million.
NIO has been trying to secure longer-term financing for at least several months. Last October, it was reportedly close to a similar deal with the government of the district of Wuxing, in the city of Huzhou, until the government backed out after concluding that the risks were too high.