(Yicai) Sept. 20 -- Nio’s shares plunged after the Chinese new energy vehicle startup announced that it would issue convertible senior notes worth a total of USD1 billion.

Nio [HKG: 9866] was trading down 12.2 percent at HKD68.80 (USD8.80) as of 1.45 p.m. in Hong Kong today. Its New York-listed stock [NYSE: NIO] closed 17.1 percent down at USD8.55 yesterday.

Nio will issue USD500 million in aggregate principal amount of convertible senior notes with an annual interest rate of nearly 3.9 percent due in 2029 and USD500 million in aggregate principal amount of convertible senior notes with an annual interest rate of over 4.6 percent due in 2030, the Shanghai-based company said in a statement yesterday. The semiannual payments of all notes will begin in April next year.

The purchasers of the notes have the option to purchase up to an additional USD75 million in aggregate principal amount of the 2029 notes and up to an additional USD75 million in aggregate principal amount of the 2030 notes, Nio added.

The proceeds from the notes will be used to repurchase a portion of existing debt securities, further strengthen the company’s balance sheet, and for other general corporate purposes, Nio noted.

Nio’s net loss widened 120 percent to CNY6.1 billion (USD835.9 million) in the second quarter from a year earlier, while revenue fell 15 percent to CNY8.8 billion. The firm’s cash reserves fell by CNY6.3 billion to CNY31.5 billion (USD4.2 billion) in the second quarter from the previous one.

Nio has accumulated losses of CNY63.1 billion since its establishment in 2016.

In July, Nio received an investment of USD738.5 million from CYVN Holdings, an investment firm backed by the Abu Dhabi government.

Editor: Futura Costaglione