China’s Xiaomi has agreed to raise $5.5bn through a placement and subscription agreement involving the sale and issuance of 800 million shares.
This deal, upsized from the planned 750 million shares, is part of the company’s efforts to accelerate its plans to electric vehicle (EV) manufacturing, reported Reuters.
The shares, priced 53.25 yuan ($7.34) each, represent approximately 3.2% of the existing issued share capital and about 1.2% of the voting rights of Xiaomi as of the announcement date.
They will be placed to a minimum of six independent professional, institutional, and/or individual investors.
The placing price reflects a discount of 6.6% compared to the Xiaomi’s last trading day’s closing price of $57 yuan.
The deal also includes a conditional agreement for the seller, Smart Mobile, to subscribe to an equivalent number of subscription shares at the same price under the general mandate. Smart Mobile owns controlling shares in Xiaomi.
Xiaomi plans to use the net proceeds from the subscription for accelerating business expansion, investing in research and development to enhance technological capabilities, and other general corporate purposes.
The completion of the placing and subscription remains subject to conditions set out in the agreement.
In July 2024, Xiaomi Auto unveiled its plans to expand vehicle production in Beijing, China after reports emerged that the company had acquired a large plot of land near its existing vehicle assembly plant in Yizhuang district.
Xiaomi’s battery powered SU7 passenger car went into production last year.
It introduced a luxury version of its SU7 electric sports car in October 2024.
