Nio Sources US$100 Million In Convertible Debentures

Chinese electric car maker Nio Inc (NYSE: NIO) announced this morning that it has secured additional funding to prop up the organization. The funding comes in the form of convertible debentures from an unaffiliated third party Asian lender.

The funds lent to Nio consist of “around” US$100 million, with the largest portion consisting of a $70 million arrangement that is expected to close on or before February 10, 2020. The remaining $30 million was previously closed on by the company in January 2020 to a second unaffiliated Asian lender on similar terms.

The terms of the notes will see the funds mature on February 4, 2021, with the debentures bearing interest at a rate of 0%. The holders of the note have the right to convert the debt into “ADS” after the six month anniversary, representing Class A ordinary shares of Nio at an initial conversion price of US$3.07 per ADS. Alternatively, the debt can be converted to equity after a bona fide issuance of equity securities of the company for fundraising purposes, into ADS at the same conversion price as such equity financing.

Nio continues to search for sources of funding, however the outcomes of such financings are unclear at this stage.

Nio is a premium Chinese electric car manufacturer, which began selling cars in the Chinese market in June 2018. The firm currently has a number of vehicle models available for sale within the market, and has been deemed by many as being the “Tesla of China.”

Nio last traded at US$4.39 on the NYSE.

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