The manufacturer of heavy-duty commercial battery-electric vehicles, Nikola (NASDAQ: NKLA) slid in pre-market trading on Monday after the company announced plans to offer $325 million in senior convertible bonds in a registered direct offering. Nikola expects to close an initial sale of $125 million in principal today and estimates net cash proceeds from the initial closing of about $124.5 million.
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The company added that its voluntary recall of more than 200 of its electric vehicles “may incur significant expenses as a result of these events and there can be no assurance as to when we will be able to resume production of our BEV trucks. As a result, our brand, business, results of operations, financial condition and cash flows may be adversely affected.”
Nikola is also going to hit the pause on new BEV sales on a temporary basis but the production of its hydrogen fuel-cell electric vehicles (FCEV) will continue as before. The company pointed out that a third-party investigator had determined that a coolant leak inside a battery pack was the probable cause of one of its trucks catching fire at its Phoenix headquarters earlier this year.
In addition, the company’s President of Energy, Carey Mendes who led the company’s hydrogen business has resigned. Nikola has so far, not named his successor.
NKLA stock has fallen sharply by more than 60% in the past year.
