Up-and-coming Chinese EV maker NIO’s stock is falling after announcing a proposed total of $1 billion in convertible senior notes on Monday.
NIO revealed in an SEC filing it plans to issue two batches of $500 million notes, convertible to American depository shares (ADS) with long-dated maturities in 2029 and 2030.
The EV maker plans to use the funds to “further strengthen its balance sheet as well as for general purposes.” NIO ended the second quarter with nearly $2 billion in cash and equivalents.
On NIO’s second-quarter earnings call in late August, Citi analyst Jeff Chung inquired about the company’s refinancing plan and cash flow projection going forward.
Stanley Qu, senior vice president of finance, responded, “I think as the delivery volume ramp-up from Q3 this year, our operating cash flow will be significantly improved”…