A big interest payment is due Feb. 1, but Nio will likely go out of cash ahead of time
Numerous reports arrived on Wednesday, Jan. 15 that Nio had raised $1 billion in funding from Guangzhou vehicle Group (OTCMKTS: GNZUF ).
But, 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 Money
Nio’s report that is third-quarter released on Dec. 30, ninety days following the end of its 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 cash and assets on hand. This means Nio lost $228.7 million when you look at the quarter that is third.
Therefore the ongoing company cannot manage to carry on burning through such considerable amounts of money.
Throughout the quarter that is third Nio burnt through $228.7 million. And also the company probably burned through an equivalent quantity within the fourth quarter.
Will $150 Million Really Assist Nio?
Nio will probably need certainly to raise significantly more than $150 million to be able to survive. We estimate that by Dec. 31, 2019, the ongoing business had $45 million or less on hand
How come i do believe therefore? Here’s exactly just what Nio stated about its money stability when you look at the December report:
“The business runs with constant loss and equity that is negative. The Company’s cash balance is perhaps maybe not sufficient to offer the desired working capital and liquidity for constant procedure in the next year. The Company’s constant procedure … relies on the Company’s capacity to obtain enough outside equity or financial obligation financing.”
The report additionally said that it’s “working on several financing projects” and will announce any developments whenever appropriate. (more…)