Nio shares came under incremental selling pressure premarket Monday after the Chinese electric vehicle manufacturer announced the pricing of its upsized equity offering.

Nio Prices at Discount

Nio said it has priced its upsized offering of 88.5 million ADSs at $17 per ADSs, at a discount to Friday’s closing price of $18.50.

The company announced the commencement of a 75-million-share equity offering Friday.

The company said it has earmarked 13.275 million ADSs to cover an overallotment option.

With the 18% hike to the originally announced offering size, the company said it expects to generate gross proceeds in excess of $1.7 billion.

This would mark the largest follow-on offering in the Chinese premium smart electric vehicle industry, the company said.

Nio has seen an improvement in fundamentals in recent times, and the offering is likely to give a cushion to the company’s growth.

Nio Beefs Up Cash Position

Nio said it expects to use $600 million to increase the share capital of Nio Chin and its ownership in the company; $357 million to repurchase equity interest held by certain minority shareholders of Nio China; and the remaining for R&D in autonomous driving technologies, global market development, and general corporate purposes.

With the offering, the company expects its cash reserves to exceed 20 billion yuan ($2.92 billion).

At last check, Nio shares were trading down 7.24% to $17.16 premarket Monday.

This story originally appeared on Benzinga.

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