Nio gets $738M funding from Abu Dhabi Government Fund.
The Abu Dhabi government has invested $738.5 million in Chinese electric automaker, Nio. This investment was made through the CYVN Holdings fund and now gives the government a 7% ownership stake in the electric car company.
The funding deal was priced at $8.72 per share, which is about 6.7% lower than Nio’s $9.35 US close on Tuesday. The deal is set to close in early July, and if CYVN Holdings maintains an ownership stake of at least 5%, it can nominate a director to Nio’s board of directors. This, however, is subject to legal, regulatory, and internal requirements.
The CEO, founder, and chairman of Nio, William Bin Li, said that the funding deal will enable Nio to make further investments in growth, technological innovation, and long-term competitiveness. Li also said that the transaction with CYVN Holdings precedes a potential partnership that helps Nio expand its international business.
In light of a plunge in cash flow due to fewer deliveries, Nio had to make a few cutbacks, including postponing research and development and major capital expenditures. However, with the new funding, the company is set to resume capital expenditure and continue with research and development projects without waiting for car deliveries to resume.
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Although Nio’s delivery figures had dropped recently, the company still managed to deliver 31,041 vehicles in Q1 2023, which is a year-over-year increase of 20.5%.
