Tesla rival Nio seeks as much as US$1.7 billion from new stock sale amid rally in Chinese electric-car makers

Nio to make second follow-on share sale in two months, seeking as much as US$1.7 billion from investors amid bullish sentiment in sector

Deal launched after stellar debut of rival Xpeng, which also raised bigger than expected IPO proceeds this week

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Nio’s self-driving electric concept car NIO Eve on display at the Shanghai Auto Show in 2019. Photo: Reuters

Published: 1:01pm, 28 Aug 2020Updated: 3:37pm, 26 Jan 2021

Chinese electric vehicle maker Nio has launched a follow-on share offering in the US market, its second in as many months, to capitalise on improved investor sentiment surrounding the sector.

The firm is offering 75 million new American depositary shares (ADS) with an option for underwriters to sell an additional 11.25 million ADS to meet demand, according to its US exchange filing. Bookrunners of the deal are Bank of America, CICC and Morgan Stanley.

The Shanghai-based start-up made its US stock debut in 2018 and raised an additional US$428.4 million cash from a follow-on sale in June at US$5.95 per share. The stock has since surged to US$19.88 on Thursday, a level that could help the firm raise between US$1.5 billion and US$1.7 billion.

The move to tap new capital has come on the heels of the successful initial public offering and debut by rival Xpeng, whose shares closed for a 41 per cent premium on their New York debut overnight. Xpeng was able to bump up its IPO price higher due to strong investors’ demand.

Nio has decided to tap the market again on the back of momentum in Nio’s business development and investors’ demand, its spokesman said in response to an email query from the South China Morning Post.

“Nio is seizing current opportunities to further enhance cash reserves through the follow-on offering,” he said.

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