NIO Secures Lifeline with $2.2 Billion from Abu Dhabi Firm

Chinese electric vehicle maker NIO has announced a significant financial boost with a $2.2 billion USD investment from CYVN Holdings L.L.C, an Abu Dhabi-based investment firm.

This investment, referred to as the December Investment Transaction, involves CYVN subscribing for 294,000,000 newly issued Class A ordinary shares of NIO at a purchase price of $7.50 per share.

This investment follows a strategic equity investment of $738.5 million made by CYVN in NIO in July 2023. Additionally, CYVN acquired Class A ordinary shares from an affiliate of Tencent Holdings Ltd. for $350 million. With the completion of the December Investment Transaction, CYVN’s stake in NIO will rise to approximately 20.1% of the company’s total issued and outstanding shares.

“With the enhanced balance sheet, NIO is well prepared to sharpen brand positioning, bolster sales and service capabilities, and make long-term investment in core technologies to navigate the intensifying competitive landscape, while continually improving execution efficiency and system capabilities. We are confident that NIO will further solidify its leading position in the transformation of the automotive industry,” said William Bin Li, founder, chairman, and CEO of NIO in a statement on Monday.

The transaction, expected to close in the final week of December, is subject to customary closing conditions. It is being conducted as a private placement under Regulation S of the Securities Act of 1933, exempting it from registration. Both NIO and CYVN will adhere to a six-month lock-up period post-closing.

“This transaction demonstrates our confidence in NIO’s unique positioning and competitiveness in the global smart EV industry. We are excited to be a long-term strategic partner of NIO and support its efforts in product innovation, technological breakthroughs, and international market expansion,” said Jassem Al Zaabi, Chairman and Managing Director of CYVN Holdings.

Following the transaction’s closure, CYVN will gain the right to nominate two directors to NIO’s board as long as it maintains at least a 15% ownership stake. If the ownership falls between 5% and 15%, CYVN will be entitled to nominate one director, in compliance with applicable laws, regulations, and the company’s articles of association.

NIO and CYVN, along with their affiliates, plan to continue their strategic and technological collaboration in international markets after the transaction.

News of the investment has shares of NIO up 4.6% on Monday.