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NIO (NYSE:NIO), an electric vehicle company based in China announced that it has entered an agreement with a Tencent (OTC Pink:TCEHY) subsidiary in a US$200 million private placement of convertible notes. The convertible notes are planned to be split into two tranches of US$100 million, where the first will pay a 2 percent premium and the …
NIO (NYSE:NIO), an electric vehicle company based in China announced that it has entered an agreement with a Tencent (OTC Pink:TCEHY) subsidiary in a US$200 million private placement of convertible notes. The convertible notes are planned to be split into two tranches of US$100 million, where the first will pay a 2 percent premium and the longer-term tranche a six percent premium prior by maturity.
As quoted in the press release:
Tencent and Mr. Li will each subscribe for US$100 million principal amount of the convertible notes, each in two equally split tranches. The Notes issued in the first tranche will mature in 360 days, bear no interest, and require the Company to pay a premium at 2% of the principal amount at maturity. The Notes issued in the second tranche will mature in three years, bear no interest, and require the Company to pay a premium at 6% of the principal amount at maturity. The 360-day Notes will be convertible into Class A ordinary shares (or ADSs) of the Company at a conversion price of US$2.98 per ADS at the holder’s option from the 15th day immediately prior to maturity, and the 3-year Notes will be convertible into Class A ordinary shares (or ADSs) of the Company at a conversion price of US$3.12 per ADS at the holder’s option from the first anniversary of the issuance date. The holders of the 3-year Notes will have the right to require the Company to repurchase for cash all of the Notes or any portion thereof on February 1, 2022.
