EV battery maker CATL to raise US$4b in Hong Kong listing
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The news: The world’s largest electric vehicle battery maker, CATL, has launched its public offering in Hong Kong and is set to become the biggest IPO of the year when it lists on 20 May.
The numbers: In a prospectus filed with the Hong Kong stock exchange on Monday, the EV battery maker said it will raise at least USD4 billion ($6.25 billion). CATL said it is selling 117.9 million shares at a maximum offer price of HK$263 per share, with the final price of the shares to be announced on or before 19 May.
109.1 million shares will be sold to institutional investors and 8.8 million shares available for Hong Kong's retail investors to bid for.
The context: CATL, which already has shares listed on the Shenzen stock exchange, is based in south-eastern China has been under scrutiny from the US, having been added to the US’ ‘blacklist’ in January for alleged links to the Chinese military. Referring to the Department of Defense’s blacklisting in its filings, CATL denied having ever engaged in “any military-related businesses or activities, therefore such designation by the DoD is a mistake.”
CATL said the designation not restrict it from conducting business with entities other than a small number of US governmental authorities, “thus is expected to have no substantial adverse impact on our business.”
The CATL filing came as the US and China made progress on trade talks, agreeing to significantly reduce reciprocal tariffs after two days of negotiations in Geneva.
In its filings, CATL said that the US’ tariff policies have been “rapidly evolving” and that while the contribution of its revenue generated from products that were directly exported to the US from China were relatively limited in recent years, “we cannot predict how tariff policies in various countries may further evolve or anticipate any potential impacts of subsequent developments in such policies on our business.”
JP Morgan and Bank of America are underwriting the listing despite an April congressional committee calling for the US banks to drop out of the deal. The FT reports that Chinese oil company Sinopec, the Kuwait Investment Authority sovereign wealth fund and Asian investment firm Hillhouse Capital are leading a group of more than 20 cornerstone investors, which also include insurer Taikang Life and Chinese local government funds.
The sources: CATL Hong Kong stock exchange filing, FT
