China’s Nio will get nearly $740 million in investment from Abu Dhabi-backed company

June 20 (Reuters) – CYVN Holdings, an Abu Dhabi government-backed firm, will invest some $738.5 million in Nio Inc, the Chinese electric vehicle maker said on Tuesday, as it seeks to bolster the company’s balance sheet .

Nio and its peers Xpeng and Li Auto are among those vying for a bigger share of the EV market in the world’s largest auto market dominated by BYD. (002594.SZ).

Under the agreement, Nio will issue approximately 85 million new Class A shares at $8.72 per share to CYVN Holdings.

The news sent US-listed shares of Nio down about 1% to $9.30.

CYVN has also reached an agreement with a subsidiary of Tencent Holdings (0700.HK)under which you will collect some shares of Nio.

Upon closing of both deals, CYVN will hold a 7% stake in Nio, the electric vehicle maker said, adding that the stake will entitle the investment firm to nominate a director to Nio’s board.

Nio said that it will pursue global business opportunities together with CYVN following the closing of the investment deal.

The electric vehicle maker’s deliveries rose about 20% in the first quarter from 25,768 units delivered to customers a year earlier.

Its cash and cash equivalents fell to 14.76 billion yuan ($2.15 billion) in the first three months of the year from 19.89 billion yuan at the end of the fourth quarter of 2022.

Reporting by Akash Sriram and Tanya Jain in Bengaluru; Edited by Shailesh Kuber

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