[SINGAPORE] Chinese electric vehicle (EV) maker Nio on Thursday (Mar 27) announced plans to raise HK$4 billion (S$688 million) through a share placement for the research and development (R&D) of smart EVs.
Some 136.8 million shares will be offered at HK$29.46 each – a nearly 10 per cent discount to the stock’s latest closing price of HK$32.55 on the Hong Kong bourse.
Net proceeds from the equity placement will be used for the R&D of smart EV technologies and new products, further strengthening the company’s balance sheet as well as general corporate purposes, said Nio in a bourse filing. It is listed in the United States, Hong Kong and Singapore.
The equity placement will close on or about Apr 7, subject to customary closing conditions.
Since the announcement, shares of Nio fell sharply on the New York Stock Exchange. In Singapore, shares of Nio closed 3.2 per cent or US$0.14 lower at US$4.29 on Thursday. Its shares in Hong Kong also declined 5 per cent at its latest close.
News of the equity placement follows the company’s weak performance in the fourth quarter, with a net loss of 7.1 billion yuan (S$1.3 billion) despite delivering a record number of vehicles in that period. This brought Nio’s net loss for the 2024 financial year to 22.7 billion yuan.
Nio noted then that it has been incurring losses since its inception. Nonetheless, it believes that its financial resources “will be sufficient” to support its operations in the ordinary course of business over the next 12 months.
“Looking ahead to 2025, we will sharpen our focus on enhancing profitability by driving cost reductions through technological advancements, optimising operational efficiency and accelerating scalable growth,” said Nio chief financial officer Stanley Qu.
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