Chinese electric vehicle (EV) firm NIO Inc (NYSE:NIO) saw its stock drop over 4% in Tuesday’s early premarket dealing, after it launched a $1 billion convertible bond financing during yesterday’s after-hours session.
The bonds are expected to have split maturity, with half due in 2029 and half in 2030, though the other financial details of the bond series, including interest rate and equity conversion terms have yet to be disclosed.
Proceeds from the raise are earmarked for the repayment of existing debt facilities, and to bolster the car maker’s balance sheet.
In New York, NIO’s NYSE-listed American depositary receipts traded 45 cents or 4.36% lower, changing hands at $9.86 per share.
Recent financial results and trading updates have shown both growing losses and also gaining momentum in international sales.
NIO is among a group of Chinese EV companies that are seen to be making inroads in terms of European and North American market share, as their model’s are comparatively cheaper than Tesla's more high-end price point.
Renault boss Luca de Meo earlier this month complained, at a car industry event in Munich, that the Chinese brands are “a generation ahead” of European EV manufacturers.
“We have to close the gap on costs with some Chinese players that started on electric vehicles a generation earlier,” he said.
“China is very competitive when it comes to the supply chain of electric vehicles […] we need to catch up fast.”
His comments preceded a PR scuffle that played out between Chinese and European authorities in the wake of the Munich industry get-together.
Last week, the European Union launched an ‘anti-subsidy’ investigation into Chinese EV makers.
Ursula von der Leyen, European Commission (EC) president, in her State of the Union speech this morning, said the EV sector is "crucial" for Europe's economy but global markets are "flooded with cheaper Chinese electric cars and their price is kept artificially low by huge state subsidies".
Also alluding to how China's solar industry had ravaged European rivals through "unfair trade practices", she said the subsidy support for Chinese EVs is "distorting the market".