Chinese electric car manufacturer NIO is reportedly seeking a secondary listing in Singapore since its Hong Kong listing plan is in uncertainty.
Based on NIO's market capitalization of $37.8 billion on Tuesday, the move could raise about $1.9 billion, assuming the company would sell up to 5% of its shares, according to the report.
In March last year, NIO applied for a secondary listing in Hong Kong, but was rejected by the Hong Kong Stock Exchange (HKEX) due to its User Trust holdings.
NIO User Trust was set up in January 2019 by NIO with the goal of building a deeper connection between the company and its users. William Li, founder and CEO of NIO, transferred an aggregate amount of 50 million ordinary shares to the trust.
Li retains the voting rights of the transferred shares, and NIO users have been given the opportunity to discuss and propose the use of the economic benefits from the transferred shares.
Later, Bloomberg reported that the company had received inquiries from the HKEX about its structure, including a user trust, and that the company's Hong Kong IPO is unlikely to happen before early 2022.
NIO's two major rivals in China, Xpeng Motors and Li Auto, have both been listed in the city, raising more than HK$10 billion each.
Since the listing requirements of the Singapore stock exchange's main board are less stringent than those of HKEX, it is not difficult to understand why NIO is considering listing in the city-state. But as part of the vast Chinese financial ecosystem, Hong Kong outperforms Singapore in both liquidity and valuation.
According to the report, one of the people familiar with the matter said NIO would not completely abandon its plans for Hong Kong and would continue discussions with regulators there.
NIO said they would not comment on market rumors.
According to the company's financial report, as of the end of the third quarter of last year, NIO had 47 billion yuan ($7.44 billion) in cash and cash equivalents.