Nio’s CHJ Limited Lends 2 Million Shares in Singapore Lending Program
Written by Cláudio Afonso | LinkedIn | X
The electric vehicle maker Nio announced on Tuesday that its unit “CHJ Limited” is participating in the Singapore Exchange (SGX) Securities Lending Program.
Answering EV, a Nio spokesperson said the move aims to “support the liquidity of NIO Inc.’s stock in the Singapore Exchange market” adding that the Lending Program is “a standardized service operated by SGX, through which hundreds of stocks are currently traded”.
According to the filing, CHJ Limited will lend up to 2,000,000 of Nio‘s Class A ordinary shares, representing only 0.1 percent of the total outstanding shares. As of the end of 2023, there were 1,932,063,749 Class A ordinary shares outstanding, and 148,500,000 Class C ordinary shares outstanding, per Nio’s annual report.
“CHJ Limited, a wholly-owned, consolidated special purpose vehicle of ours, is participating as a lender in the Singapore Exchange Securities Trading Limited securities lending program, or the SGX Securities Lending Program,” Nio stated.
In May 2022, Nio listed its Class A ordinary shares on the Singapore Exchange becoming the first auto company listed on three exchanges and the first Chinese company listed in New York, Hong Kong, and Singapore.
The world’s largest asset manager, BlackRock, explains that securities lending involves the temporary transfer of shares or bonds from the owner to a borrower. In exchange, the borrower provides the lender with other shares, bonds, or cash as collateral and pays a borrowing fee.
“Under this program, CHJ Limited will lend up to 2,000,000 of our Class A ordinary shares, US$0.00025 per share, or approximately 0.1% of our total Class A ordinary shares issued and outstanding as of the date of this prospectus supplement,” Nio added in the filing.
Securities lending is also utilized in hedging, arbitrage, and fails-driven borrowing where the securities lender benefits by earning a small return on securities held in its portfolio or meeting cash-funding needs.
“The Loaned Shares may be publicly traded on the Singapore Exchange during the loan period,” the filing stated. The loan period lasts from the prospectus date until terminated by either The Central Depository (Pte) Limited (CDP) or CHJ Limited. Borrowers eligible include CDP members, depositary agents, and licensed banks.
Never miss an update
Later in the filing, Nio noted that neither the company nor CHJ Limited “will receive any proceeds from the lending of the Class A ordinary shares,” except for a lending fee to CHJ Limited.
“We are registering the Class A ordinary shares being registered hereby in connection with the sale of such shares to the extent that they are sold to U.S. persons, as defined under Regulation S, or for the account or benefit of U.S. persons. Save for a lending fee to be paid to CHJ Limited under the SGX Securities Lending Program, neither we nor CHJ Limited will receive any proceeds from the lending of the Class A ordinary shares being registered hereby,” Nio noted.
Earlier in the day, Swedbank AB disclosed in a filing that it added 1,187,310 shares of electric vehicle startup Nio to its portfolio, valued at over $5.34 each by the end of the first quarter. With Tuesday’s closing price at $5.25 per share, the position is now valued at $6.23 million.
Never miss an update
In the same filing, the bank disclosed owning 66,154 shares of the hybrid manufacturer Li Auto. On the last day of March, the shares were valued at over $2 million although given the recent drop in the stock price, the current value is below $1.4 million.
According to Fintel, there are currently 629 institutional shareholders holding a total of 350,336,979 shares in the Shanghai-based EV manufacturer.
Last week, the Chinese conglomerate, Tencent Holdings, submitted a form to the Securities and Exchange Commission (SEC), revealing the sale of 28,454,077 shares of Nio. As a result, Tencent now holds 95,657,938 shares in the company. This marks a 22.93 percent decrease from their previous filing in June 2023.
Written by Cláudio Afonso | LinkedIn | X
