Chinese electric-vehicle maker NIO (NYSE:NIO) said that its secondary offering of American depositary shares has been priced at $5.95 per share and that it will offer more shares than it had planned, a sign that demand for the offering was strong.
NIO said on Thursday morning that it increased its offering to 72 million shares, up from 60 million as of yesterday, raising $428.4 million minus the fees due to the banks underwriting the offering.
Those banks, Morgan Stanley, Credit Suisse, and China International Capital Corporation, now have a 30-day option to purchase an additional 10.8 million American depositary shares, up from 9 million in the company's original offering plan.
NIO plans to use the proceeds of the offering to fund a cash investment that it agreed to make in its Chinese business ("NIO China") as part of a financing deal with economic-development authorities in China.
Those authorities, in China's Anhui province and in Anhui's capital city of Hefei, agreed in April to invest 7 billion Chinese yuan (about $990 million) in exchange for a 24.1% stake in NIO's China-based assets, on the condition that NIO contributed additional cash of its own to the venture.
"We expect NIO China will use the cash investments for research and development of products, services and technology, development of our manufacturing facilities and roll-out of our supply chain, operation and development of our sales and service network and general business support purpose[s]," the company said in a statement on Wednesday.
NIO's shares fell about 5% on Thursday morning after the news was released.