(Bloomberg) -- NIO Inc. struck a definitive pact for a 7 billion yuan ($1 billion) investment from entities led by a municipal government in China, alleviating concerns that the electric-car maker is running out of cash.

As part of the deal, NIO will transfer all of its assets and core businesses in China into a new company and hand over 24.1% of that entity to the new investors. NIO will own 75.9% of the company, called NIO China, and will inject 4.26 billion yuan of cash into it, according to a statement on Wednesday.

The maneuver is set to allay shareholders’ worries about NIO’s liquidity. The Chinese company lost about $1.6 billion in 2019 and had $151.7 million of cash, equivalents and short-term investments left at the end of the year, forcing it to reiterate last month that it may not have liquidity to survive 12 months.

Heavy spending on marketing and splashy showrooms have failed to generate demand for NIO’s ES8 and ES6 electric sport utility vehicles. The virus pandemic intensified NIO’s woes as shoppers stayed away from dealerships.

NIO flagged the funding pact with the municipal government of Hefei in February. NIO said Wednesday the new investors are Hefei Construction Investment Holding (Group) Co., CMG-SDIC Capital Management Co., and Anhui High and New Technology Industrial Investment Co.

Shares of NIO have lost about half their value since the company’s 2018 initial public offering in New York. The new pact in China won’t change the shareholding structure of the parent company.

Assets outside China, such as research and development centers, are not included in NIO China, the company said.

©2020 Bloomberg L.P.