Chinese EV maker NIO today announced plans to offer 60 million American depositary shares (ADSs), each representing one Class A ordinary share of the company.
NIO said it intends to grant the underwriters in the ADS offering a 30-day option to purchase up to an additional 9 million ADSs.
NIO will price the share sale after the US market closes on Friday. Based on its last-traded price of $45.22 on Thursday, the offer will raise as much as $3.12 billion, though such offerings are typically priced at a discount to entice investors.
NIO stock went down by 4.8 percent to trade at $43.5 in after-hours trading session on Thursday. The stock retreated about 24.7 percent the record high of $57.2 on November 24.
Morgan Stanley & Co. LLC and China International Capital Corporation Hong Kong Securities Limited are acting as representatives for the underwriters for the ADS Offering.
NIO said it plans to use the net proceeds from the ADS offering mainly for (i) research and development of new products and next generations of autonomous driving technologies, (ii) sales and service network expansion and market penetration and (iii) general corporate purposes.
Will NIO follow Tesla, XPeng, Li Auto in issuing additional shares?
Prior to this, Tesla, XPeng, and Li Auto have all issued or announced plans to issue additional shares, leaving NIO the only major EV maker not having announced such plans.
Tesla said on Tuesday that it plans to issue additional shares and expects to receive up to $5 billion in capital. Tesla fell from up to down 2.55 percent in pre-market trading hours on the news.
XPeng Motors (NYSE: XPEV) announced on Monday that it plans to issue an additional 40 million ADSs, with an over-allotment option of 6 million ADSs to the underwriters. Following the announcement, XPeng fell more than 10% in pre-market trading on Monday.
Each ADS represents two shares of Class A common stock, with a maximum price of $25.33 per additional Class A share, which is calculated as a maximum price per ADS of $50.66. The aggregate amount of the financing is expected to be up to $1.942 billion, after expenses, and $2.23 billion if the over-allotment option is fully exercised.
On December 2, Li Auto filed an F-1 with the US Securities and Exchange Commission (SEC) for the issuance of 47 million additional ADSs for net proceeds of approximately $1.62 billion.
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