Global Courant
Nio’s ET5 is on display at the Central China International Auto Show on May 25, 2023 in Wuhan, China.
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BEIJING – Chinese electric car company Nio announced Tuesday that it has received $738.5 million in new capital from a fund owned by the Abu Dhabi government.
The strategic investment ultimately gives the fund, CYVN Holdings, a 7% stake in Nio.
The deal was priced at $8.72 per share, according to a release. That’s 6.7% lower than where Nio’s US-listed shares closed on Tuesday, down about half a percent.
Nio said earlier this month that lackluster auto deliveries are hurting cash flow and that it has slowed capital spending and some research and development projects.
The company then said it had enough money to support its business. Nio reported cash and cash equivalents of 14.76 billion yuan ($2.07 billion) as of March, lower than what it reported for the end of 2021 and 2022.
Middle Eastern interest in China
In recent months, Middle Eastern investors have increasingly sought opportunities in China, especially in electric cars.
China-based funds have also looked to Middle Eastern capital as investors from the US and other regions became cautious on China over regulatory uncertainty.
Nio said it expects the Abu Dhabi fund deal to close in early July, after which they plan to “pursue opportunities in Nio’s international business.”
The agreement also gives CYVN the right to appoint a director to Nio’s board, the announcement said.
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