CATL, the world’s largest maker of electric vehicle batteries, has set its price on a jumbo share offering of 410 yuan per share, according to a Bloomberg report from a source familiar with the matter.
CATL is known to seek funding of around 45 billion yuan or about US$ 6.7 billion from a private placement. The CATL share offering will be the second largest share sale in the world this year. This offer is under LG Energy Solution Ltd, which is also a manufacturer of electric vehicle batteries, which amounted to US$10.7 billion in January which was also the largest IPO in South Korea.
The bid price was 12 percent cheaper than the closing price of the company’s shares on the shenzen exchange and 21% more expensive than the basic offering price of 339.67 yuan.
CATL shares were down about 1.2% at 11:01 am Thursday on the Shenzhen exchange after rising as much as 1.8% earlier. The stock has fallen about 22% this year, which makes its market cap value around $160 billion.
Bloomberg said the placement of CATL’s 45 billion yuan shares, even after its share price has fallen about 20 percent so far this year, shows that the battery maker is looking for short-term profits while focusing on increasing production capacity to meet soaring demand and cementing its position as a market leader in the market. the next few years.
Companies that have benefited from the electric car boom have begun to attract market interest by selling off billions of dollars of stock in recent months. BYD Co., a company that makes electric cars and batteries, raised $1.8 billion in a stock offering in Hong Kong in October.
The Warren Buffett-backed company is preparing to sell its batteries to Tesla Inc., an executive told Chinese media last week. CATL, based in Ningde in eastern China’s Fujian province, began selling shares on Monday after showing its intention to raise funds last year.
In November, it said it cut its target of raising funds to 45 billion yuan from 58.2 billion yuan. The proceeds from the sale will be used for the production and improvement of lithium-ion battery production in four cities in China, as well as research and development.