(Reuters) – Abu Dhabi government-backed CYVN Holdings will invest about $738.5 million in Nio Inc, the Chinese electric car maker said Tuesday, as it looks to boost the company’s balance sheet.
Nio and colleagues Xpeng and Li Auto are among those vying to grab a bigger share of the electric vehicle market in the world’s largest auto market dominated by BYD.
Under the deal, Nio will issue approximately 85 million new Class A shares at $8.72 per share to CYVN Holdings.
The news sent US-listed Nio shares down about 1%, to $9.30.
CYVN has also entered into a deal with a subsidiary of Tencent Holdings, under which it will acquire some shares of Nio.
Upon closing of the two deals, CYVN will own a 7% stake in Nio, the EV maker said, adding that the acquisition would authorize the investment firm to nominate one director to Nio’s board.
Nio said it will jointly pursue global business opportunities with CYVN after the investment deal closes.
The electric car maker’s deliveries rose 20% in the first quarter, from 25,768 units delivered to customers a year earlier.
Cash and cash equivalents fell to 14.76 billion yuan ($2.15 billion) in the first three months of the year from 19.89 billion yuan at the end of the fourth quarter of 2022.
(Reporting by Akash Sriram and Tanya Jain in Bengaluru; Editing by Shailesh Cooper)