BEIJING - Li Auto (NASDAQ:LI) Inc. (NASDAQ:LI; HKEX:2015), a prominent player in China's new energy vehicle market, has announced a repurchase option for its 0.25% Convertible Senior Notes due 2028. The company informed holders of the notes that they have the right to require the company to buy back the notes on May 1, 2024, for 100% of the principal amount, plus any accrued and unpaid interest.
The repurchase right, which is detailed in the Indenture dated April 12, 2021, will expire on Monday, April 29, 2024, at 5:00 p.m. New York City time. Li Auto has stated that it will file a Tender Offer Statement on Schedule TO with the United States Securities and Exchange Commission (SEC) and that the necessary documents will be available through the Depository Trust Company and the paying agent, Deutsche Bank (ETR:DBKGn) Trust Company Americas.
Holders of the notes have the option to sell back their notes in multiples of $1,000 principal amount. The repurchase price will be equal to the principal amount of the notes repurchased plus any accrued and unpaid interest up to, but not including, the repurchase date. On the repurchase date, which is also an interest payment date under the terms of the Indenture and the notes, the company will pay accrued and unpaid interest to all holders of record as of April 15, 2024.
The aggregate principal amount of the notes currently outstanding is $862,500,000. If all holders exercise their put right, the total cash purchase price would be equivalent to the outstanding principal amount. The process for exercising the put right began today, and holders must follow the procedures outlined in the company's Put Right Notice.
Li Auto has made no recommendation to noteholders regarding the exercise of the put right. This announcement serves as an informational notice and is not an offer to purchase or a solicitation of an offer to sell the notes or any other securities.
The company specializes in the design, development, manufacture, and sales of premium smart electric vehicles and has been a pioneer in commercializing extended-range electric vehicles in China. Li Auto's current model lineup includes several family-oriented SUVs and MPVs.
This news is based on a press release statement from Li Auto Inc .
InvestingPro Insights
As Li Auto Inc. (NASDAQ:LI; HKEX:2015) navigates the financial complexities of its 0.25% Convertible Senior Notes due 2028, the company's market performance remains a key point of interest for investors. The most recent metrics from InvestingPro show that Li Auto's stock has demonstrated a steady price performance over various timeframes, with a 1.54% one-week total return and a consistent 1.74% return over the past six months. Notably, the company's stock is trading close to its 52-week high, at 99.71% of the peak value.
InvestingPro Tips indicate that Li Auto's stock generally trades with low price volatility, which could be a factor for investors considering the stability of their portfolio amidst the repurchase option news. However, the company does have weak gross profit margins and a valuation that implies a poor free cash flow yield. Additionally, it is important for investors to note that Li Auto does not pay dividends, which could influence the decision-making process for income-focused portfolios.
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