U.S.-listed Chinese electric vehicle startup Nio is offering 72 million American depositary shares (ADSs), in a possible sign of the company trying to shore up cash reserves amid strong demand by US and Asian investors.

Nio has set the offering price at $5.95, lower than Wednesday’s closing price of $6.3 on the New York Stock Exchange, meaning that the company is aiming to raise $428.4 million from the share sale, according to a stock filing to the U.S. Securities and Exchange Commission.

The Shanghai-based company will use the capital raised to bankroll the research and development of products and technology, build manufacturing facilities and supply chains as well as improve sales networks, the filing said.

Nio will also provide the underwriters with an over-allotment option allowing them to buy an additional 10.8 million ADSs within a 30-day period, the filing added. Morgan Stanley, Credit Suisse and CICC are the joint-bookrunners for the deal.

Nio’s latest fundraising effort comes after the company made record monthly deliveries of 3,436 vehicles in May. In the first quarter of 2020, Nio reported a net loss of $238.9 million, a decrease of 35.5% on the same period of 2019, according to its latest earnings report.

In the filing, Nio also laid bare the risks of investing in its ADSs as its China-based auditor is not subject to inspections by the Public Company Accounting Oversight Board (PCAOB), which plays a key role in America’s ongoing efforts to ban Chinese companies that do not meet certain criteria from its stock exchanges. In May, the U.S. Senate passed the Holding Foreign Companies Accountable Bill, which stipulates that companies must delist from U.S. bourses if they fail to let the PCAOB conduct an audit for three years in a row.

Contact reporter Ding Yi (yiding@caixin.com)

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