China’s Nio to get $2.2 billion investment from Abu Dhabi’s CYVN
2023.12.18 05:42
© Reuters. The logo of NIO is pictured on the NIO House, the showroom of the Chinese premium smart electric vehicle manufacture NIO Inc. in Berlin, Germany August 17, 2023. REUTERS/Annegret Hilse/File Photo
SHANGHAI (Reuters) -Electric vehicle maker Nio (NYSE:) has signed a pact for an investment of $2.2 billion from CYVN Holdings, an investment vehicle based in Abu Dhabi, the Chinese company said on Monday.
The investment comes as Nio, with its EV sales and profitability under pressure in a price war started by Tesla (NASDAQ:), has sought to boost efficiency by cutting a tenth of the workforce and deferring non-core projects.
The deal, expected to close in the final week of December, would take CYVN’s shareholding to 20.1% of Nio’s total issued and outstanding shares, following an investment of $1 billion in July, Nio said in a statement on its website.
That would make CYVN the largest single shareholder of Nio, although founder and chief executive William Li retains the most voting power, with his ownership of Class ‘C’ ordinary shares.
CYVN, which will subscribe to 294,000,000 newly issued Class A ordinary shares priced at $7.50 each, will also be entitled to nominate two directors to Nio’s board, the company said.
The company, whose Nio-branded EVs compete with premium brands such as Mercedes-Benz (OTC:) and BMW (ETR:) in China, has been developing two new brands for mass markets that it aims to bring them to Europe from 2025, its executives have said.
In its drive to become more efficient, Nio is considering a spin-off of its battery production unit while continuing to develop technologies for key components on its own, Reuters has reported previously.
