Chinese electric-vehicle maker NIO (ticker: NIO) mentioned it was providing $1 billion of convertible bonds, becoming a member of different EV corporations Nikola (NKLA) and Fisker (FSR) in elevating funds on this method.
Convertible bonds may be became shares within the firm, probably diluting present holders of the inventory however permitting the corporate to borrow cash and decrease rates of interest than with commonplace company bonds.
American depositary receipts of NIO (ticker: NIO) traded down 4.3% in premarket buying and selling Tuesday. The U.S.-listed shares have gained greater than 5% this 12 months however are nonetheless virtually 50% decrease than they had been 12 months in the past. NIO has racked up losses this 12 months in a crowded marketplace for luxurious electrical autos.
“The company plans to use a portion of the net proceeds from the Notes Offering to repurchase a portion of the existing debt securities, and the remainder mainly to further strengthen its balance sheet position as well as for general corporate purposes,” the corporate mentioned in an announcement.
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