Nikola announced on Monday that received a $200 million investment from Funds advised by Antara Capital LP through the purchase of Convertible Senior Notes. Nikola CFO Kim Brady commented on the agreement: “Including the $200 million investment we announced today, Nikola would have had a total cash and liquidity position of approximately $1.0 billion as of March 31, 2022.
The Fund have agreed to purchase $200 million aggregate amount of 8.00% / 11.00% Convertible Senior Notes due 2026 (the “Notes”). The Notes will bear interest at a rate of 8.00% if paid in cash, or at a rate of 11.00% through the issuance of additional Notes, at the Company’s election.
The Notes will be convertible at an initial conversion price to be determined prior to closing. The initial conversion price will represent a 30% premium to the lower of Nikola’s volume-weighted average price over a pre-determined time period between this announcement and closing of the Notes and the closing price of Nikola’s common stock on the last trading day prior to the date of this announcement, but will not be lower than 110% of such closing price. Upon conversion, Nikola will have the right to settle the Notes in cash, shares, or any combination thereof at its election. The Notes will mature on May 31, 2026, unless redeemed, repurchased, or converted prior to such date.
“We are very pleased to announce the investment in Nikola Convertible Senior Notes, which is a testimonial to the Company’s recent accomplishments of having achieved both operational and strategic milestones. These include shipment of our initial serial production battery-electric (BEV) trucks to dealers for customer delivery and the start of fuel cell electric (FCEV) truck pilot testing with select customers, as well as the continued expansion of our strategic partner network,” said Nikola CEO Mark Russell. “We believe that Nikola is at an inflection point as we see our customer momentum accelerating which requires scaling of our operations and investments in the hydrogen infrastructure build-out.”
Nikola intends to use the net proceeds from the sale of the Notes along with its other liquidity sources for business expansion in the form of scaling truck manufacturing and tooling setup, accelerating the development of its hydrogen infrastructure, as well as for general corporate purposes.
Nikola CFO Kim Brady commented on the agreement: “Including the $200 million investment we announced today, Nikola would have had a total cash and liquidity position of approximately $1.0 billion as of March 31, 2022, which we intend to deploy to fund our growth plans. The investment is the next step in solidifying our liquidity position at attractive terms. At the same time, we are strengthening our long-term, institutional investor base across the capital structure, which is reflective of Nikola’s evolving maturity and increasing attractiveness to investors.”
Th company recently announced that Sophia Jin will be retiring from the Board after this year’s annual meeting in June, decreasing Board size from ten to nine members. Jin’s departure does not affect the ongoing strategic relationship between Nikola and Hanwha as both continue to have mutual confidence in the vision to move a zero-emissions future forward.
Nikola will report its first quarter ended March 31, 2022 financial results on Thursday, May 5, 2022. On that day, Nikola’s management will hold a conference call and webcast at 9:30 a.m. ET (6:30 a.m. PT) to review and discuss the company’s business and outlook. The webcast will be available at https://nikolamotor.com/investors/news?active=events (live and replay).
The company recently announced that signed a partnership with the market leading commercial finance company ENGS Commercial Finance Co., a member of Mitsubishi HC Capital Group. The partnership aims to facilitate sales of Class 8 Nikola Tre battery-electric vehicles (BEVs) and Nikola Tre hydrogen fuel-cell electric vehicles (FCEVs). Start of production of the Tre BEVs began last week at Nikola’s Coolidge, Arizona manufacturing facility. The Nikola Tre FCEV deliveries are anticipated in 2023.