Shares of Chinese electric vehicle manufacturer Nio Inc – ADR NIO are moving to the upside Monday.
What Happened: Nio said in a release that strategic investors — including Hefei City Construction and Investing Holding, CMD-SDIC Capital and Anhui Provincial Emerging Industry Investment — have completed cash injections for the first two installments of funding commitments for Nio China.
The company said it has received 4.8 billion yuan ($677.8 million) of the first two instalments totaling 5 billion yuan of cash investments. The remaining 200 million yuan will be received prior to Sept. 30, according to the company.
The investor group committed to a total investment of 7 billion yuan.
Definitive agreements regarding the cash injection were announced in late April.
Nio committed to inject its core businesses and assets into Nio China while also contributing 4.26 billion yuan cash to Nio China.
Of the cash portion, the company said it has injected 1.278 billion yuan for the first installment and another 1.278 billion yuan for the second installment.
Why It Matters: Nio's fundamentals have started to turn a corner following the COVID-19-induced downturn seen for much of January and February.
The company's cash position is still precarious.
"The strategic investments in NIO China will provide sufficient funds to support NIO's continuous efforts to lead the technology and product development of the premium smart electric vehicles, and to offer the best user experience and services," CEO William Bin Li, Nio's chairman and CEO, said in a statement.
The company said in the near term it will focus on improving its production capacity and expanding its network coverage to further accelerate our growth.
At last check, Nio shares were rising 2.54% to $7.08.
Related Links:
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Nio CEO Says Tesla An Ally In Increasing Sales, Remains Bullish On Chinese EV Market Growth
Courtesy photo.
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