China’s CATL, the world’s largest electric vehicle battery maker is scheduled to issue new shares on the Hong Kong stock exchange, eyeing proceeds of as much as $4 billion. This will make its issue the largest this year in Hong Kong, the Financial Times reported, citing a prospectus filed with the stock exchange.
The investors that have already signed up for stock from the issue include China’s oil major CNOOC, the Kuwait Investment Authority, and investment firm Hillhouse Capital. The offering could fetch more than $5 billion, the FT noted in its report, if demand proves even more robust than the company expects.
The main underwriters of the offering are U.S. heavyweights JP Morgan and Bank of America despite a sense of wariness among U.S. investors about buying CATL stock amid the ongoing trade tensions between Beijing and Washington. These tensions, which also feature national security concerns on the part of the U.S. government, saw the Pentagon add CATL to a list of companies with links to the Chinese military.
The battery giant has rejected the designation, saying it had “never engaged in any military-related businesses or activities”. Concerns among investors in the United States remain, however.
CATL is on a massive global expansion path and will use most of the money it raises in the offering for expansion purposes. More specifically, some $3.5 billion from the expected proceeds would go towards building a new factory in Hungary as the company zeroes in on the European market. With the EU’s electric vehicle mandates and no local battery industry to talk about, this is where the money is for EV makers of CATL’s size. In its latest advance over competitors, the Chinese EV battery major announced a superfast charging battery that could achieve 80% charge in 10 minutes.
By Irina Slav for Oilprice.com
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