NIO Inc (NYSE:NIO) shares are trading higher Monday after the company announced a strategic equity investment from CYVN Holdings.
What Happened: Nio has entered into a share subscription agreement with CYVN in which CYVN will invest $2.2 billion in cash to subscribe for 294 million newly issued Class A shares for $7.50 per share.
CYVN, an Abu Dhabi-based investment company, previously invested $738.5 million in Nio. Following the new announcement, the company will own approximately 20.1% of the China-based EV maker.
“We are deeply inspired by CYVN’s vision to accelerate the global transition to a more sustainable future, and we appreciate its endorsement of NIO’s unique values,” said William Li, founder, chairman and CEO of NIO.
“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.”
The new investment is expected to close at the end of December. Following the closing, CYVN will be entitled to nominate up to two directors to Nio’s board depending on how much it beneficially owns.
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NIO Price Action: Nio shares were up 8.65% at $8.66 at the time of publication, according to Benzinga Pro.
Photo: courtesy of Nio.
