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Nikola announces $200M convertible senior notes investment; approx. $1B cash and liquidity position

Nikola Corporation announced that an institutional investor has agreed to make a $200-million investment in Nikola through the purchase of Convertible Senior Notes. Funds advised by Antara Capital LP have agreed to purchase $200 million 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 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 31 May 2026, unless redeemed, repurchased, or converted prior to such date.

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.

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. The investment is the next step in solidifying our liquidity position at attractive terms. At the same time, we are strengthening our long-term, institutional investor base across the capital structure, which is reflective of Nikola’s evolving maturity and increasing attractiveness to investors.

—Nikola CFO Kim Brady

Citigroup Global Markets Inc. acted as sole financial advisor to Nikola on the transaction, and Pillsbury Winthrop Shaw Pittman LLP served as legal advisor. Davis Polk & Wardwell LLP served as legal advisor to Citigroup Global Markets Inc.

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