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Why Nio Is Investing In Chinese Online Used Car Dealer Uxin

Benzinga2021-06-16

Chinese EV manufacturer NIO Inc, which has astrong competitive positioning in the Chinese EV market, is investing in a used car retailer.

What Happened:Beijing-based Uxin Ltd, which operates as a nationwide online used car dealer in China, said Nio Capital,the venture capital arm of Nio, and Joy Capital have agreed to invest up to $315 million in the company.

Concurrently, Uxin said it has agreed with its convertible note-holders, including 58.com, TPG and Warburg Pincus, to convert their convertible notes in an aggregate principal amount of $69 million into Class A ordinary shares of the company.

More than 10 important investors, including NIO Capital, Joy Capital and the convertible notes holders, have agreed not to sell their shares in the next nine months.

The transaction is subject to customary closing conditions stipulated in the agreements.

Why It's Important:Nio's founder, chairman and CEOWilliam Licommended Uxin for its one-stop business model that provides car buyers nationwide with "high quality vehicles and comprehensive after-sales services."

Meanwhile, Joy Capital sees the investment as an attractive opportunity to take advantage of the booming used car market in China.

For Nio, this should give a sense of déjà vu.

The company was struggling with an acute cash crunch for much of 2019. Even as rumors regarding a potential bankruptcy swirled around, it received a lifeline in the form of state financial support from the local Hefei government, where its joint-venture manufacturing plant is situated.

At last check, Nio shares were down 2.79% to $45.19 and Uxin, despite the fund infusion, was down 13.32% at $4.49.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment66

  • sebsebseb
    ·2021-06-24
    Fly
    Reply
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  • 785bfcf1
    ·2021-06-18
    ... Need to top up some more then...
    Reply
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  • sebsebseb
    ·2021-06-17
    Is that truw
    Reply
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  • PotterHeads
    ·2021-06-16
    ???
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  • Ndragons
    ·2021-06-16
    Hnmmm
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  • lamedillon
    ·2021-06-16
    ?
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  • Nickystonks
    ·2021-06-16
    Nio will do well
    Reply
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  • Tiny_m
    ·2021-06-16
    That’s good 
    Reply
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  • Wahahoho
    ·2021-06-16
    Wow! Good news 
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  • Zhengxi
    ·2021-06-16
    Like and comment pls
    Reply
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  • Yinasim
    ·2021-06-16
    Interesting
    Reply
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  • Fatboiiiswim
    ·2021-06-16
    Like and comment
    Reply
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  • KoloQ
    ·2021-06-16
    Cool
    Reply
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  • lwkjason
    ·2021-06-16
    Interesting move.
    Reply
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  • Jyingyang
    ·2021-06-16
    Alot of potential for uxin, good to invest in
    Reply
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  • cheffun
    ·2021-06-16
    Yes
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  • Cedric77
    ·2021-06-16
    I am steadfast on NIO. Infact, IMO my take on EV are TESLA, NIO and BYD. Just owns these 3 shares your portfolio for EV shld be in a good ground.
    Reply
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  • A79
    ·2021-06-16
    Yeah!Pls like and comment for good luck to all!
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    Fold Replies
    • Jyingyang
      Good luck
      2021-06-16
      Reply
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  • Gilch
    ·2021-06-16
    Interesting
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  • Warantbuffet
    ·2021-06-16
    Cool
    Reply
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