(Reuters) -CYVN Holdings, a firm backed by the Abu Dhabi government, will invest about $738.5 million in Nio Inc, the Chinese electric vehicle maker said on Tuesday, as it looks to bolster the company’s balance sheet.
Nio and peers Xpeng and Li Auto are among those competing to grab a larger EV market share in the world’s largest automotive market dominated by BYD.
Under the deal, Nio will issue about 85 million new Class A shares at $8.72 per share to CYVN Holdings.
The news sent Nio’s U.S.-listed shares down about 1% at $9.30.
CYVN has also entered into a deal with an affiliate of Tencent Holdings, under which it will pick up some shares of Nio.
Upon closing of both deals, CYVN will own 7% stake in Nio, the EV maker said, adding that the holding will entitle the investment firm to nominate one director to Nio’s board.
Nio said it will pursue global business opportunities jointly with CYVN following the closing of the investment deal.
The EV maker’s deliveries rose about 20% in the first quarter from 25,768 units handed over to customers, a year earlier.
Its 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 end of the fourth quarter of 2022.
(Reporting by Akash Sriram and Tanya Jain in Bengaluru; Editing by Shailesh Kuber)
