NIO Inc. (NYSE: NIO) (“NIO” or the “Company”), a pioneer in
China’s premium smart electric vehicle market, today announced a
proposed offering (the “Notes Offering”) of US$650 million in
aggregate principal amount of convertible senior notes due 2026
(the “2026 Notes”) and US$650 million in aggregate principal amount
of convertible senior notes due 2027 (the “2027 Notes,” and,
together with the 2026 Notes, the “Notes”), subject to market
conditions and other factors. The Company intends to grant the
initial purchasers in the Notes Offering a 30-day option to
purchase up to an additional US$100 million in aggregate principal
amount of the 2026 Notes and US$100 million in aggregate principal
amount of the 2027 Notes. The Company plans to use the net proceeds
from the Notes Offering mainly for general corporate purposes and
to further strengthen its cash and balance sheet positions.
When issued, the Notes will be senior, unsecured
obligations of NIO. The 2026 Notes will mature on February 1, 2026
and the 2027 Notes will mature on February 1, 2027, unless
repurchased, redeemed or converted in accordance with their terms
prior to such date. Prior to August 1, 2025, in the case of the
2026 Notes, and August 1, 2026, in the case of the 2027 Notes, the
Notes will be convertible at the option of the holders only upon
satisfaction of certain conditions and during certain periods.
Holders may convert their Notes at their option at any time on or
after August 1, 2025, in the case of the 2026 Notes, or August 1,
2026, in the case of the 2027 Notes, until the close of business on
the second scheduled trading day immediately preceding the relevant
maturity date. Upon conversion, the Company will pay or deliver to
such converting holders, as the case may be, cash, the Company’s
American Depositary Shares (“ADSs”), each currently representing
one Class A ordinary shares of the Company, or a combination of
cash and ADSs, at the Company’s election. The interest rate,
initial conversion rate and other terms of the Notes will be
determined at the time of pricing of the Notes.
Holders of the Notes may require the Company to
repurchase all or part of their Notes for cash on February 1, 2024,
in the case of the 2026 Notes, and February 1, 2025, in the case of
the 2027 Notes, or in the event of certain fundamental changes, at
a repurchase price equal to 100% of the principal amount of the
Notes to be repurchased, plus accrued and unpaid interest, if any,
to, but excluding, the relevant repurchase date. In addition, on or
after February 6, 2024, in the case of the 2026 Notes, and February
6, 2025, in the case of the 2027 Notes, until the 20th scheduled
trading day immediately prior to the relevant maturity date, the
Company may redeem the Notes for cash subject to certain
conditions, at a redemption price equal to 100% of the principal
amount of the Notes to be redeemed, plus accrued and unpaid
interest, if any, to, but excluding, the relevant optional
redemption date. Furthermore, the Company may redeem all but not
part of the Notes in the event of certain changes in the tax
laws.
Contemporaneously with, or shortly after, the
pricing of the Notes, the Company expects to enter into one or more
separate and individually privately negotiated agreements with one
or more holders of its outstanding 4.50% convertible senior notes
due 2024 (the “2024 Notes”) to exchange a portion of the 2024 Notes
for ADSs (each, a “2024 Notes Exchange” and collectively, the “2024
Notes Exchanges”). The terms of each 2024 Notes Exchange are
anticipated to be individually negotiated with each holder of the
2024 Notes that is a party to such 2024 Notes Exchange and will
depend on several factors, including the market price of the ADSs
and the trading price of the 2024 Notes at the time of each such
2024 Notes Exchange. No assurance can be given as to how much, if
any, of the 2024 Notes will be exchanged or the terms on which they
will be exchanged.
The Company expects that holders of the 2024
Notes that dispose of their 2024 Notes in any 2024 Notes Exchange
(in particular, holders that employ a convertible arbitrage
strategy with respect to the 2024 Notes) may sell the ADSs in the
market and/or in privately negotiated transactions and/or enter
into or unwind economically equivalent derivative transactions with
respect to the ADSs to hedge their exposure in connection with the
2024 Notes Exchanges and their investment in the 2024 Notes, which
may include transactions executed with certain financial
institutions that are parties to the Company’s existing capped call
transactions and/or existing zero-strike call option transactions,
which the Company entered into in February 2019 in connection with
the issuance of the 2024 Notes (respectively, the “existing capped
call counterparties”, the “existing capped call transactions”, the
“existing zero-strike call counterparties” and the “existing
zero-strike call transactions”), or their respective affiliates.
Certain initial purchasers of this Notes Offering also act as the
existing capped call counterparties and the existing zero-strike
call counterparties. Any of the above activities could decrease (or
reduce the size of any increase in) the market price of the ADSs or
the trading price of the Notes or the outstanding 2024 Notes at
that time. If any of the 2024 Notes Exchanges are effected
concurrently with this Notes Offering, any of the above activities
may also impact the initial conversion prices of the Notes.
In connection with the 2024 Notes Exchanges, the
Company may enter into agreements with some or all of the existing
capped call counterparties concurrently with or shortly after the
pricing of the Notes to terminate a portion of the relevant
existing capped call transaction(s), or otherwise such portion of
the existing capped call transactions shall terminate according to
their terms following the settlement of the 2024 Notes Exchanges,
in each case, in a notional amount corresponding to the portion of
the principal amount of such 2024 Notes exchanged. In connection
with such terminations and the related unwind of the existing hedge
positions with respect to the existing capped call transactions,
the Company expects the existing capped call counterparties and/or
their respective affiliates to concurrently with or shortly
following the pricing of the Notes to enter into or unwind various
derivative transactions economically equivalent to buying the ADSs
and/or to, shortly following the pricing of the Notes, buy the ADSs
in privately negotiated transactions, which may include
transactions executed with holders of the 2024 Notes that
participate in the 2024 Notes Exchanges and/or purchasers of the
Notes. Any of the above activities could increase (or reduce the
size of any decrease in) the market price of the ADSs or the
trading price of the outstanding 2024 Notes at that time. The
Company cannot predict the magnitude of the market activities
described above or the overall effect they will have on the price
of the Notes, the 2024 Notes or the ADSs, and the corresponding
effect on the initial conversion prices of the Notes. Depending on
the times or periods during which it occurs, the hedge unwind
activity of the existing capped call counterparties may to some
extent offset the effects of the hedge unwind activity of the
holders of the 2024 Notes described above. In connection with such
terminations of the existing capped call transactions, the Company
expects to receive deliveries of the ADSs in such amounts as
specified pursuant to any such termination agreement or, otherwise,
payments of cash or deliveries of the ADSs in amounts that are
determined pursuant to the terms of the existing capped call
transactions following the settlement of the 2024 Notes
Exchanges.
The Notes, the ADSs deliverable upon conversion
of the Notes, if any, prior to the resale restriction termination
date (as set forth in the terms of the Notes) and the Class A
ordinary shares represented thereby have not been and will not be
registered under the Securities Act of 1933, as amended (the
“Securities Act”) or securities laws of any other places. They may
not be offered or sold within the United States or to U.S. persons,
except to persons reasonably believed to be qualified institutional
buyers in reliance on the exemption from registration provided by
Rule 144A under the Securities Act and to certain persons in
offshore transactions in reliance on Regulation S under the
Securities Act.
This press release shall not constitute an offer
to sell or a solicitation of an offer to purchase any securities,
nor shall there be a sale of the securities in any state or
jurisdiction in which such an offer, solicitation or sale would be
unlawful.
This press release contains information about
the pending Notes Offering and 2024 Notes Exchanges, and there can
be no assurance that the Notes Offering and/or 2024 Notes Exchanges
will be completed. The Notes Offering is not contingent on the
closing of the 2024 Notes Exchanges.
About NIO Inc.
NIO Inc. is a pioneer in China’s premium smart
electric vehicle market. Founded in November 2014, NIO’s mission is
to shape a joyful lifestyle. NIO aims to build a community starting
with smart electric vehicles to share joy and grow together with
users. NIO designs, jointly manufactures, and sells smart premium
electric vehicles, driving innovations in next-generation
technologies in connectivity, autonomous driving, and artificial
intelligence. Redefining the user experience, NIO provides users
with comprehensive and convenient power solutions, the Battery as a
Service (BaaS), NIO Pilot and NIO Autonomous Driving (NAD),
Autonomous Driving as a Service (ADaaS) and other user-centric
services. NIO began deliveries of the ES8, a 7-seater flagship
premium electric SUV, in China in June 2018, and its variant, the
6-seater ES8, in March 2019. NIO officially launched the ES6, a
5-seater high-performance premium electric SUV, in December 2018
and began deliveries of the ES6 in June 2019. NIO officially
launched the EC6, a 5-seater premium electric coupe SUV, in
December 2019 and began deliveries of the EC6 in September 2020. On
January 9, 2021, NIO ET7, the smart electric flagship sedan and
NIO’s first autonomous driving model, was officially launched.
Safe Harbor Statement
This press release contains statements that may
constitute “forward-looking” statements pursuant to the “safe
harbor” provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These forward-looking statements can be identified by
terminology such as “will,” “expects,” “anticipates,” “aims,”
“future,” “intends,” “plans,” “believes,” “estimates,” “likely to”
and similar statements. Among other things, the terms of the Notes,
whether the Company will complete the Notes Offering and the 2024
Notes Exchanges and a description of various hedging activities
contain forward-looking statements. NIO may also make written or
oral forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission, in its annual report to
shareholders, in press releases and other written materials and in
oral statements made by its officers, directors or employees to
third parties. Statements that are not historical facts, including
statements about NIO’s beliefs, plans and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: NIO’s strategies; NIO’s future business development,
financial condition and results of operations; NIO’s ability to
develop and manufacture a car of sufficient quality and appeal to
customers on schedule and on a large scale; its ability to grow
manufacturing in collaboration with partners; its ability to
provide convenient charging solutions to its customers; the
viability, growth potential and prospects of the newly introduced
BaaS and ADaaS; NIO’s ability to satisfy the mandated safety
standards relating to motor vehicles; its ability to secure supply
of raw materials or other components used in its vehicles; its
ability to secure sufficient reservations and sales of the ES8,
ES6, EC6 and ET7; its ability to control costs associated with its
operations; its ability to build the NIO brand; general economic
and business conditions globally and in China and assumptions
underlying or related to any of the foregoing. Further information
regarding these and other risks is included in NIO’s filings with
the SEC. All information provided in this press release is as of
the date of this press release, and NIO does not undertake any
obligation to update any forward-looking statement, except as
required under applicable law.
For more information, please
visit: http://ir.nio.com
For investor and media inquiries, please
contact:
NIO Inc.
Investor Relations
Tel: +86-21-6908-2018
Email: ir@nio.com
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