NIO Inc. (NYSE: NIO) (“NIO” or the “Company”), a pioneer in
China’s premium smart electric vehicle market, today announced the
pricing 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”) (the “Notes Offering”). The Notes have been offered to
persons reasonably believed to be qualified institutional buyers in
reliance on the exemption from registration provided by Rule 144A
under the Securities Act of 1933, as amended (the “Securities
Act”), and certain persons in offshore transactions in reliance on
Regulation S under the Securities Act. In addition, the Company has
granted 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 not bear interest, and the
principal amount of the 2026 Notes will not accrete. The 2027 Notes
will bear interest at a rate of 0.50% per year, payable
semiannually in arrears on February 1 and August 1 of each year,
beginning on August 1, 2021. 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 initial conversion rate of the 2026 Notes is
10.7458 ADSs per US$1,000 principal amount of such 2026 Notes
(which is equivalent to an initial conversion price of
approximately US$93.06 per ADS and represents a conversion premium
of approximately 50.0% above the closing price of the Company’s
ADSs on January 12, 2021, which was US$62.04 per ADS). The initial
conversion rate of the 2027 Notes is 10.7458 ADSs per US$1,000
principal amount of such Notes (which is equivalent to an initial
conversion price of approximately US$93.06 per ADS and represents a
conversion premium of approximately 50.0% above the closing price
of the Company’s ADSs on January 12, 2021). The relevant conversion
rate for each series of the Notes is subject to adjustment upon the
occurrence of certain events.
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.
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 approximately US$581.7 million principal amount
of the outstanding 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.
In connection with the 2024 Notes Exchanges, the
Company expects to enter into agreements with some or all of the
existing capped call counterparties shortly after the pricing of
the Notes to terminate a portion of the relevant existing capped
call transactions 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. 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.
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 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.
The Company expects to close the Notes Offering
on or about January 15, 2021, subject to the satisfaction of
customary closing conditions.
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, 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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