Nio said on Wednesday it completed a $1.16 billion equity offering, issuing a total of 209,090,918 Class A ordinary shares across markets.
The offering had been announced exactly a week ago, with the Shanghai-headquartered EV maker aiming to strengthen its balance sheet while continuing to invest in its products and battery swapping technology.
The company founded and led by William Li aims to reach its first profitable quarter in Q4 as it sharply increases sales while slashing investments, fixed costs, and R&D.
The deal comprised 160,823,190 American depositary shares (ADSs) at $5.57 each, 20,995,000 Class A ordinary shares at HK$43.36 apiece, and an additional 27,272,728 ADSs from the underwriters’ full option exercise on September 10.
Nio said it intends to use the proceeds to invest in core smart-EV technologies, develop future platforms and models across its three brands, expand its battery-swapping and charging network, strengthen its balance sheet and for general corporate purposes.
A prospectus supplement filed last week set the base size at up to 181.8 million Class A ordinary shares split between ADSs and ordinary shares in Hong Kong and Singapore.
The move implies roughly $1.1 billion in gross proceeds using the reference prices in the SEC filing — $6.17 per ADS in New York, HK$47.18 ($6.01) in Hong Kong and $6.02 in Singapore as of September 8.
The filing also indicated proceeds could rise to about $1.26 billion–$1.29 billion if underwriters exercised a 30-day option to buy an additional 27.3 million ADSs — which they subsequently did.
The prospectus added terms not detailed in the initial press release, including 90-day lock-ups for Nio, its directors and executives, subject to customary exceptions, and noted that underwriters may engage in stabilization transactions and short sales following the offering.
The capital raise follows management’s goal, reaffirmed earlier this month, of reaching an average of 50,000 monthly sales in the fourth quarter across Nio, Firefly and Onvo.
Nio’s current monthly record, set in August, is about 31,300 vehicles.
For September, the official guidance — which was provided amid the second quarter earnings results on September 2 — is to break the record again.
Morgan Stanley Asia Limited, UBS Securities LLC, UBS AG Hong Kong Branch and Deutsche Bank AG, Hong Kong Branch served as representatives for the underwriters.
UBS raised on Tuesday Nio’s price target to $8.50 while upgrading the rating to Buy.
Deustche bank said earlier today that the firm’s dealer information showed that Nio has received “about 100,000” non-firm orders for its third-generation ES8 since pre-sales began on August 21.
The SUV will be officially launched at the company’s annual event scheduled for Hangzhou this Saturday, September 20.
