Nikola announces $200M convertible senior notes investment
The investment is the next step in solidifying Nikola’s liquidity position at attractive terms.
Nikola Corporation announced that an institutional investor has agreed to make a $200 million investment in Nikola through the purchase of Convertible Senior Notes.
Its recent accomplishments have included both operational and strategic milestones, including the shipment of its initial serial production battery-electric (BEV) trucks to dealers for customer delivery and the start of fuel cell electric (FCEV) truck pilot testing with select customers, as well as the continued expansion of the strategic partner network.
Funds advised by Antara Capital LP have agreed to purchase $200 million in aggregate amount of 8.00% / 11.00% Convertible Senior Notes due 2026. The Notes will bear interest at a rate of 8.00% if paid in cash, or at a rate of 11.00% through the issuance of additional Notes, at the Company’s election.
The Notes will be convertible at an initial conversion price to be determined prior to closing. The initial conversion price will represent a 30% premium to the lower of Nikola’s volume-weighted average price over a pre-determined time period between this announcement and the closing of the Notes and the closing price of Nikola’s common stock on the last trading day prior to the date of this announcement, but will not be lower than 110% of such closing price.
Upon conversion, Nikola will have the right to settle the Notes in cash, shares, or any combination thereof at its election. The Notes will mature on May 31, 2026, unless redeemed, repurchased, or converted prior to such date.
Mark Russell, Nikola CEO, said, “We believe that Nikola is at an inflection point as we see our customer momentum accelerating which requires scaling of our operations and investments in the hydrogen infrastructure build-out.”
Nikola intends to use the net proceeds from the sale of the Notes along with its other liquidity sources for business expansion in the form of scaling truck manufacturing and tooling setup, accelerating the development of its hydrogen infrastructure, as well as for general corporate purposes.
Nikola CFO Kim Brady commented, “Including the $200 million investment we announced today, Nikola would have had a total cash and liquidity position of approximately $1.0 billion as of March 31, 2022, which we intend to deploy to fund our growth plans.”
