Nikola strikes $200m deal by selling senior debt

Nikola Corp. struck a $200 million cash deal with an investor, offering convertible notes that can be redeemed in cash or stock at a discount. The startup is raising new money for the electric truck production ramp at a new factory where it hosted tours last week.

The startup also tapped a line of credit with Tumim Stone Capital for an additional $196 million. It traded about 28.8 million new shares. That would be the product based on Monday’s $7 closing price of Nikola shares, according to a filing with the Securities and Exchange Commission.

“We have been clear that we will continue to raise capital and we will stay more than 12 months ahead of our expenses,” CEO Mark Russell said in an interview last week during a program of launch for the Class 8 Tre battery electric truck. “That’s our strategy. The good news is that starting this quarter, we will have revenue to offset.

Nicholas (NASDAQ: NKLA) went public in a merger with special-purpose acquisition company VectoIQ in June 2020. It has yet to report any significant revenue. Nikola predicts that it will set aside around $25 million from the sale of 300 to 500 electric trucks this year.

Nikola gets itashes for debts

Antara Capital has agreed to buy $200 million of convertible senior debt with 8% cash interest or 11% interest if paid in Nikola shares. Nikola can choose how to repay the loan, which matures in May 2026 – in cash, stock or a combination. The loan prevents Nikola from borrowing beyond $500 million, with some exceptions, according to a filing with the SEC.

The company last week activated a stock listing that could fetch up to $1.2 billion.

Nikola is ramping up production at its factory in Coolidge, Arizona. It will increase from one vehicle per day to five per day by the end of the year. He has orders and letters of intent for several hundred electric trucks. Depending on the load carried, weather and other conditions, the Tre can travel up to 350 miles on a single charge.

Hydrogen fuel cell versions of the Tre are also in pre-production at the factory. Nikola will bundle truck leases, maintenance and seven years of fuel from the end of 2023.

Additionally, Nikola needs money to start building hydrogen refueling stations and developing the fuel.

“We believe Nikola is at an inflection point as we see our customers’ momentum accelerating, which requires scaling up our operations and investing in building hydrogen infrastructure. “Russell said in a statement. Press release Monday.

Antara’s investment is part of a strategy to strengthen Nikola’s institutional investor base over the long term, Chief Financial Officer Kim Brady said.

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