China electric carmaker NIO seeks US$1.3bil in US IPO
Tencent-backed firm gearing up to take on the likes of Tesla
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.