NIO snags $740M investment from Abu Dhabi government fund to expand international business

Chinese EV automaker NIO has confirmed that a holding firm backed by the Abu Dhabi government is investing close to $740 million dollars in exchange for new Class A shares in the company. As a new minority shareholder, NIO intends to jointly pursue new global business opportunities and accelerate growth in new markets outside of China.

NIO Inc ($NIO) remains one of the leading EV innovators in its native China, and like many of its competitors, has ventured into new markets like Europe to garner a larger piece of the growing global market.

We’ve watched the automaker ship its lineup of EVs to new markets in Germany, Norway, and Denmark, complete with battery swap stations to support its new customers. Additionally, we’ve seen NIO tease plans for a new EV sub-brand coming to Europe.

All the while, the automaker is developing and implementing innovative battery technologies with the help of behemoths in the space like CATL. NIO CEO William Li has spoken quite candidly in the past about the company’s goal of becoming a top-five-selling automaker by 2030, which includes internal plans to enter the US market by 2025.

As NIO looks to expand further into a globally recognize EV brand, it requires financial peace of mind to bolster its balance sheet and ensure it has the funding to support such ambitious growth this decade. With the help of an Abu Dhabi government fund, NIO appears to have found the cash it seeks in exchange for a minority stake of new company shares.

NIO issues ordinary shares to Abu Dhabi fund for $740M

NIO shared that it signed a new share subscription with Abu Dhabi investment firm CYVN Holdings today that totals $738.5 million in cash in exchange for 84,695,543 shares of NIO’s Class A ordinary shares at a purchase price of $8.72 each.

CYVN Holdings investment firm majority-owned by the Abu Dhabi government focused on deploying capital “in smart and advanced mobility solutions to create value and accelerate the transition to a more sustainable future.”

Additionally, NIO shared that the Abu Dhabi owned fund is also in the process of a share purchase agreement with an affiliate of Tencent (an existing NIO shareholder of NIO) to purchase and another 40,137,614 shares of NIO’s Class A ordinary shares. If and when approved, Abu Dhabi’s CYVN Holdings will own about 7% of NIO’s total issued and outstanding shares. NIO founder and CEO William Li spoke:

The strategic investments from CYVN Holdings demonstrate NIO’s unique values in the smart electric vehicle industry. The Investment Transaction will further strengthen our balance sheet to power our continuous endeavors in accelerating business growth, driving technological innovations and building long-term competitiveness. In addition, we are excited about the prospect of partnering with CYVN Holdings to expand our international business. With the vision of Blue Sky Coming, we will continue to strive for technological breakthroughs and user experiences beyond expectations, contributing to a more sustainable future for the globe.

For reference, NIO means “a new day,” but its Chinese name, “Weilai,” means Blue Sky Coming, hence what Li is referencing above.

Following the approved closing of the fresh investment, NIO states CYVN Holdings will have the right to nominate a director to its board as long as it continues to beneficially own at least 5% of the company’s outstanding share capital. The Abu Dhabi-backed fund has also agreed not to sell, transfer, or dispose of any NIO shares for at least six months after the closing of the deal.

The pending shares transaction is subject to customary closing conditions and is expected to be completed in early July.

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