Nio Inc. (NIO) Buys Stake in GreenWing Resources
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Shares of Nio Inc. (NYSE: NIO) are up 2.78% in mid-day trading Monday following an announced strategic funding transaction with Australian lithium company, Greenwing Resources.
According to a press release by Greenwing, NIO has agreed to pay $12,000,000 to Greenwing to subscribe for 21,818,182 Greenwing shares at a deemed issue price of $0.55 per share (Placement) and a call option toacquire, at NIO’s election, between 20% to 40% of the issued capital of Andes Litio SA, which holds options rights over the San Jorge Lithium Project.
The funding will enable Greenwing to accelerate its exploration program at San Jorge Lithium Project in Catamarca province, Argentina and aligning NIO as the Company’s potential joint venture and offtake partner.
Greenwing plans to use at least 80 percent of the proceeds from the placement to be used for the San Jorge lithium project, with the remainder to be used for general working capital purposes and costs of the proposed transaction, according to the company.
The move by NIO appears to be in preperation for a longer-term future of access to raw material supplies
As a result of the deal, Greenwing's shares traded in Australia closed up 65.31 percent
Upon completion of the Placement, NIO will hold approxamitly 13.16% of shares on a fully-diluted basis as of the date of issuance, and will have a right to a nominee on the board.
By Michael Elkins | [email protected]
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