NIO said it will redeem its 8.6 percent stake in NIO China from investors.
The move comes after the Chinese EV maker issued an additional 88.5 million shares last month to raise $1.7 billion.
In April 2020, the Company entered into definitive agreements with a group of investors in Hefei (collectively, the “Hefei Strategic Investors”) in connection with the strategic investments into NIO China. Under these definitive agreements, as amended and supplemented, before NIO Anhui is converted into a company limited by shares for the purpose of its qualified IPO, the Company and its designated parties have the right to redeem 50% of the equity interests in NIO Anhui held by the Jianheng New Energy Fund, one of the Hefei Strategic Investors.
On September 16, 2020, NIO Nextev Limited , on behalf of NIO, entered into a share transfer agreement with Jianheng New Energy Fund, pursuant to which NIO Nextev will redeem from Jianheng New Energy Fund 50% of the equity interests in NIO Anhui currently held by the Jianheng New Energy Fund, which accounts for 8.6% equity interests in NIO Anhui.
The total consideration of the redemption will be RMB511.5 million, consisting of the actual capital increase payment Jianheng New Energy Fund has made plus prorated interest accrued at an interest rate of 10% per annum. Pursuant to the cash injection schedule in the definitive agreements, the remaining RMB 2 billion payable by Jianheng New Energy in connection with its cash contribution obligation, corresponding to 6.9% of the equity interests in NIO Anhui, has yet become due as of the date of the share transfer agreement. The Company will assume such cash contribution obligation after the share redemption is completed.
As previously disclosed, the Company will apply a portion of the proceeds from its offering of American depository shares in August 2020 to pay for the redemption and cash contribution. Upon the completion of the share redemption, the Company will hold an aggregate of 84.5% controlling equity interests in NIO China. Further, the Company has approved to change the name of NIO (Anhui) Holding Co., Ltd. to NIO Holding Co., Ltd.