A big interest payment is due Feb. 1, but Nio will likely go out of cash upfront
Numerous reports arrived on Jan. 15 that Nio had raised $1 billion in financing from Guangzhou Automobile Group (OTCMKTS: GNZUF ) wednesday.
Nevertheless, on the South China Morning Post reported that Guangzhou Automobile had confirmed that it would potentially invest up to only $150 million in Nio thursday.
Nio Is Starving for Cash
Nio’s report that is third-quarter released on Dec. 30, 3 months following the end of their matching quarter. The report shows cash that is nio’s was down seriously to just $274.3 million.
But on June 30, 2019, Nio had $503 million in money and assets readily available. Which means Nio lost $228.7 million within the quarter that is third.
So that the company cannot manage to keep on burning through such considerable amounts of money.
Throughout the quarter that is third Nio burned through $228.7 million. In addition to business likely burned through the same quantity into the quarter that is fourth.
Will $150 Million Really Assist Nio?
Nio will probably need certainly to raise significantly more than $150 million to be able to endure. I estimate that by Dec. 31, 2019, the ongoing business had $45 million or less readily available
How come i believe therefore? Here’s just what Nio said about its cash stability when you look at the report december:
“The business runs with constant loss and negative equity. The Company’s cash stability is maybe perhaps not adequate to produce the desired working capital and liquidity for constant procedure within the next year. The Company’s continuous procedure … is based on the Company’s capacity to get adequate external equity or financial obligation funding.”
The report additionally said that it’s “working on several financing projects” and will announce any developments whenever appropriate.
Therefore here may be the issue. By Jan. 31, for a price of $229 million per quarter, Nio will burn off through another $76 million. Continue reading “Nio Has To Raise More Cash to Endure”