Nio Stock Gains 7% on Sale of Convertible Notes to Tencent Affiliate

Nio's chairman has subscribed to the private placement of the company's notes in an equal amount of $100 million.

Author: Anthony Russo   

Nio Inc. (NYSE: NIO) saw its shares jump more than 7 percent Thursday after the electric vehicle maker said it will raise $200 million in a private placement of convertible notes to its chairman and an affiliate of a Chinese tech giant.

Nio, based in Shanghai, announced in a statement today that Bin Li, its chairman and chief executive, and an affiliate of Tencent Holdings Ltd. (HKEX: 0700) have both subscribed to acquire $100 million each in convertible bonds.

Nio said a portion of the notes will expire in 360 days with no interest and the company will pay a premium of 2 percent on the principal at the date of their maturity. The second portion of the bonds will expire in three years with no interest and the company will pay a premium of 6 percent on the principal at the maturity date.

The 360-day notes will be convertible into American depositary shares at the conversion price of $2.98 each, while longer-term notes will be convertible at $3.12 per ADS, Nio said.

Nio plans to announce its second-quarter results on Sept. 24, according to a separate statement by the company.

Nio's stock closed Thursday at $2.95 per share, boosted also by the hopes of high-level trade talks between China and the United States scheduled for early October.