China elec­tric car­maker NIO seeks US$1.3bil in US IPO

Ten­cent-backed firm gear­ing up to take on the likes of Tesla

The Star Malaysia - StarBiz - - Front Page -

TOKYO: NIO Inc, the Chi­nese elec­tric car­maker backed by tech­nol­ogy gi­ant Ten­cent Hold­ings Ltd, is seek­ing as much as US$1.3bil in its planned US ini­tial public of­fer­ing (IPO) as it gears up to take on the likes of Tesla Inc.

The com­pany is of­fer­ing 160 mil­lion Amer­i­can de­posi­tary shares (ADS) at US$6.25 to US$8.25 each, ac­cord­ing to a reg­u­la­tory fil­ing in the US.

Shares are ex­pected to price on Sept 11 fol­low­ing a road­show that started yes­ter­day in Hong Kong, ac­cord­ing to terms for the deal ob­tained by Bloomberg.

NIO is among Chi­nese elec­tric-car com­pa­nies rais­ing money to fund ag­gres­sive prod­uct de­vel­op­ment and ex­pan­sion amid the auto in­dus­try’s seis­mic shift to­ward al­ter­na­tive-power and au­ton­o­mous ve­hi­cles.

China’s gov­ern­ment is also push­ing to in­crease the use of bat­tery-pow­ered cars to cut pol­lu­tion and re­duce de­pen­dence on im­ported oil, spawn­ing a clutch of star­tups in the na­tion aim­ing to take on Tesla and legacy car­mak­ers.

NIO planned to use pro­ceeds from the of­fer­ing for re­search and de­vel­op­ment, sales and mar­ket­ing, and build­ing man­u­fac­tur­ing fa­cil­i­ties and the sup­ply chain, the com­pany said in the fil­ing.

The of­fer­ing has been struc­tured to en­sure vot­ing rights re­main con­cen­trated with founder Wil­liam Li and Ten­cent. Af­ter the IPO, Li will own 14.5% of the elec­tric-car maker and have 48.3% of the vot­ing power through Class C shares.

The Class B stock owned by Ten­cent and re­lated en­ti­ties af­ter the of­fer­ing will rep­re­sent 12.9% of NIO and 21.5% of the vot­ing power, ac­cord­ing to the prospec­tus.

As much as 5% of the ADS, each rep­re­sent­ing one Class A share, has been re­served for di­rec­tors, of­fi­cers, em­ploy­ees and other in­di­vid­u­als as­so­ci­ated with com­pany, it said. In­clud­ing an over­al­lot­ment op­tion, the IPO could raise as much as US$1.5bil.

Af­ter meet­ing in­vestors in Hong Kong yes­ter­day and to­day, the NIO man­age­ment will be in Sin­ga­pore to­mor­row, ac­cord­ing to the deal terms. The road­show will con­tinue next month in Lon­don and the US.

NIO’s move for the US list­ing comes amid Tesla’s plan to set up a gi­gafac­tory in Shang­hai. NIO, for­merly known as Nex­tEV, is among sev­eral star­tups to have sprouted in China af­ter the gov­ern­ment in­tro­duced in­cen­tives.

In Jan­uary, By­ton, a Nan­jing-based com­pany started by for­mer BMW AG ex­ec­u­tives, be­came the first Chi­nese au­tomaker to hold a large-scale un­veil­ing at the Con­sumer Elec­tron­ics Show in Las Ve­gas.

Oth­ers like WM Mo­tor Tech­nol­ogy Co and XPeng Mo­tors, backed by fund­ing from Alibaba Group Hold­ing Ltd, are also de­vel­op­ing new mod­els.

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