Nio Inc – ADR (NYSE: NIO) shares came under incremental selling pressure premarket Monday after the Chinese electric vehicle manufacturer announced the pricing of its upsized equity offering.
Nio Prices At Discount: Nio said it has priced its upsized offering of 88.5 million ADSs at $17 per ADS, at a discount to Friday’s closing price of $18.50.
The company announced the commencement of a 75-million-share equity offering Friday.
The company said it has earmarked 13.275 million ADSs to cover an overallotment option.
With the 18% hike to the originally announced offering size, the company said it expects to generate gross proceeds in excess of $1.7 billion.
This would mark the largest follow-on offering in the Chinese premium smart electric vehicle industry, the company said.
Nio has seen an improvement in fundamentals in recent times, and the offering is likely to give a cushion to the company’s growth.
Nio Beefs Up Cash Position: Nio said it expects to use $600 million to increase the share capital of Nio Chin and its ownership in the company; $357 million to repurchase equity interest held by certain minority shareholders of Nio China; and the remaining for R&D in autonomous driving technologies, global market development and general corporate purposes.
With the offering, the company expects its cash reserves to exceed 20 billion yuan ($2.92 billion).
NIO Price Action: At last check, Nio shares were trading down 7.24% to $17.16 premarket Monday.
Photo courtesy of Nio.
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