Nio’s ET5 is showcased at the Central China International Auto Show in Wuhan, China on May 25, 2023.
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Chinese electric car company Nio announced on Tuesday that it has secured $738.5 million in new funding from a fund owned by the Abu Dhabi government.
This strategic investment grants CYVN Holdings, the fund, a 7% stake in Nio.
The deal was priced at $8.72 per share, representing a 6.7% discount from the closing price of Nio’s U.S.-listed shares on Tuesday.
Earlier this month, Nio revealed that its car deliveries were not meeting expectations and affecting cash flow, leading to the delay of certain capital expenditure and research and development projects.
The company reassured that it has sufficient cash to support its operations, with cash and cash equivalents of 14.76 billion yuan ($2.07 billion) as of March, although this figure is lower than the previous year-end figures for 2021 and 2022.
Middle East interest in China
In recent months, investors from the Middle East have been increasingly seeking opportunities in China, particularly in the electric car sector.
China-based funds have also turned to Middle East capital as investors in the United States and other regions have become cautious due to regulatory uncertainty in China.
Nio expects the deal with the Abu Dhabi fund to be completed in early July, following which they plan to pursue international business opportunities.
According to the announcement, the agreement also grants CYVN the right to nominate a director to Nio’s board.
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