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Chinese language electric-vehicle battery maker CATL stated it could elevate not less than $4bn in what is ready to be Hong Kong’s greatest share sale this yr.
The corporate’s shares might be priced this week and start trading on Could 20, in response to a prospectus filed with the Hong Kong inventory change on Monday.
Chinese language oil firm Sinopec, sovereign fund Kuwait Funding Authority and Asian funding agency Hillhouse Capital are main a gaggle of greater than 20 cornerstone traders.
Native Chinese language authorities funds, together with Luoyang Sci-tech Funding, and insurance coverage agency Taikang Life, are additionally among the many cornerstone traders.
CATL, which already has shares listed on China’s Shenzhen inventory change, is the world’s greatest producer of batteries for EVs and power storage techniques.
The secondary itemizing might elevate greater than $5bn if demand is robust and a greenshoe choice — which permits underwriters to promote extra shares than deliberate — is exercised.
The pricing of its Hong Kong shares is 1.4 per cent beneath its mainland worth, as of market shut on Friday. The comparatively small low cost displays stronger investor demand, in response to an individual near the deal. Shenzhen-traded shares of CATL jumped virtually 3 per cent to Rmb255 ($35.30) on the Monday opening.
CATL has grown quickly on the again of China’s EV increase and has launched into an bold international enlargement plan, together with building battery factories in Europe and licensing know-how to US carmakers.
Primarily based in Ningde, south-eastern China, the corporate has additionally drawn scrutiny from Washington over nationwide safety fears and there may be uncertainty over its long-term place within the US market amid commerce tensions between Beijing and Washington.
Monday’s submitting got here because the US stated it had made “substantial progress” over two days of commerce talks with Chinese language officers in Geneva, an indication the world’s two greatest economies would possibly de-escalate their commerce struggle.
Nonetheless, CATL stated in its submitting that US tariff insurance policies are “quickly evolving” and it “can’t predict how tariff insurance policies in varied international locations could additional evolve”, or doubtlessly affect its enterprise.
The submitting additionally confirmed that US funding banks, together with JPMorgan and Financial institution of America, are the primary underwriters of the itemizing, regardless of a US congressional committee on April 17 calling for US banks to drop out of the deal.
Based on one banker near the deal, some US traders are nonetheless weighing their involvement within the share sale amid considerations over the Pentagon’s addition of CATL to its checklist of firms with affiliations to the Chinese language navy.
Whereas such designations have little authorized affect, it dangers reputational harm and additional scrutiny from US businesses.
CATL reiterated its denial in Monday’s submitting of those allegations. It stated that it has “by no means engaged in any military-related companies or actions” and stated it’s “participating” with the US Division of Protection to “tackle the false designation”.
The corporate additionally famous that the designation solely restricts it from working with a small variety of US businesses and isn’t anticipated to have a broader affect on its enterprise.
