NIO to plow $600 million in expanding equity interest in NIO China

Shanghai (Gasgoo)- On September 25, 2020, NIO Inc. (“NIO” or the “Company”), through its wholly owned subsidiary, signed an agreement to subscribe for the newly increased capital of NIO (Anhui) Holding Co., Ltd. (“NIO Anhui”), the legal entity of NIO China, at a subscription price of $600 million, the EV startup announced on September 28.

Upon the completion of the capital subscription and the previously announced share redemption, NIO will hold a total of 86.5% controlling equity interests in NIO China. A portion of the proceeds from its issuance of American depositary shares (ADSs) in August 2020 will be used to pay for the capital subscription.

At the end of August, NIO announced the pricing of the offering of 88,500,000 ADSs at a price of $17 per share. The net proceeds are planned to be mainly used to increase the share capital of and the Company's ownership in NIO China, to repurchase equity interests held by certain minority shareholders of NIO China, and for research and development in autonomous driving technologies, global market development and general corporate purposes.

NIO said on September 18 that it has agreed to redeem an 8.6% equity stake in NIO China for consideration of 511.5 million yuan ($75.131 million).

Under amended and supplemented agreements with strategic investors, NIO and its designated parties have the right to buy back 50% of the equity interests in NIO China held by Jianheng New Energy Fund, one of NIO China's strategic investors, the company said in the filing.

According to Chinese corporate data search platform Qichacha, the registered capital of NIO Anhui increased to roughly 5.817 billion yuan ($854.423 million) on September 27. Three shareholders affiliated to NIO--NIO Nextev Limited, NIO User Enterprise Limited and NIO Power Express Limited—have their combined equity interest in NIO China grow to 86.4755%.

In April 2020, NIO entered into definitive agreements with a group of investors in Hefei (collectively, the “Hefei Strategic Investors”) in connection with the strategic investments into NIO China. Under these agreements, as amended and supplemented, before December 31, 2021, NIO and its designated affiliates have the right to unilaterally subscribe for up to US$600 million of the then newly increased registered capital of NIO Anhui, which subscription price is the same as the price of investments by the Hefei Strategic Investors in NIO Anhui. In connection with full exercise of this right in the Capital Subscription, the Hefei Strategic Investors have duly waived their pre-emptive rights.