Uxin to Raise $25 Million Through Two Private Placements

The used car dealer will sell an aggregate of 84.69 million Class A ordinary shares to two undisclosed investors.
Anthony RussoOct 06,2020,17:52

Uxin Ltd. (Nasdaq: UXIN) announced Tuesday that it will raise roughly $25 million through two private placements.

Under the agreements, the used car dealer will sell an aggregate of 84.69 million Class A ordinary shares to two undisclosed investors, according to a statement posted by the company today.

Separately, Uxin said it has entered a “letter agreement” with affiliates of private equity firm Warburg Pincus, investment firm TPG, and China’s largest online marketplace for classifieds 58.com (NYSE: WUBA) to modify the conversion price of the convertible notes agreement the parties struck over a year ago.

In June 2019, Uxin issued $230 million worth convertible notes to 58.com, TPG and Warburg.

Earlier this year, Uxin waved goodbye to its B2B operations and sold it to an affiliate of 58.com for $105 million.

“With our auto financing-related guarantee liabilities and credit risk behind us, we have shifted our strategic focus to a new phase of development where we offer high-quality value-for-money used cars and best-in-class car purchasing services to our customers,” Kun Dai, the founder, chairman, and chief executive officer of Uxin, said in a statement today.

He added, “We are happy to see that these investors support our strategic direction and long-term growth trajectory. With their support and our business transformation and upgrade in place, we are confident that we will be able to strengthen our market position as China’s leading national online used car dealer.”

Still, Dai noted in the company’s first quarter earnings report of fiscal 2021 that the divesture of its B2B operations would not only impact its financials for the quarter ending June but the quarter ending September as well. Plus, Uxin continues to face impact from Covid-19 as well. In the three months through June, Uxin’s revenues declined by more than six times to $8.80 million.

By midday, the stock in Uxin was trading nearly 2% lower from Monday’s close at 93 cents per American depositary share.

Shares of Uxin have plummeted nearly 60% year-to-date. Also, the stock has not closed above $1 per share since Sept. 15.

The closing of the private placements are expected to take place this month.

Topics:Uxin, 58.com, Warburg, TPG