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Feb. 7 (NBD) – Chinese electric car startup NIO (NYSE: NIO) said on Thursday it has entered into an agreement to sell convertible bonds worth 70 million U.S. dollars in principal amount to an unaffiliated Asian investment fund through a private placement. 

The private placement is expected to close on or around Feb. 10, subject to satisfaction of customary closing conditions. The Bank of New York Mellon, London Branch will act as the trustee. 

National Business Daily noticed that NIO also completed a similar deal with another unaffiliated fund in January this year. The combined proceeds from the foregoing two offerings are about 100 million U.S. dollars. 

The notes to be issued bear zero interest and will mature on February 4, 2021, shows NIO's announcement. Prior to maturity, the holder of the notes has the right to convert the notes into American Depositary Shares (ADS) representing Class A ordinary shares of NIO at an initial conversion price of 3.07 U.S. dollars per ADS, a price that is roughly 30 percent lower than NIO's closing stock price of 4.39 U.S. dollars on Wednesday.

Affected by this, shares of NIO dived 7.06 percent to close at 4.08 U.S. dollars on Thursday.

In the announcement, the Shanghai-based company also said it is pressing ahead with several other financing projects, but uncertainties remain.

According to NIO's financial report for the third quarter of 2019, the electric vehicle maker reported 1.96 billion yuan in balance of cash and cash equivalents, restricted cash and short-term investment as of September 30, 2019.

Email: gaohan@nbd.com.cn