CATL said to price jumbo stock offering

Image from CATL

Contemporary Amperex Technology Co. Ltd., the world’s biggest maker of batteries for electric cars, has priced its jumbo stock offering at 410 yuan per share, people familiar with the matter said.

The Chinese company, better known as CATL, was seeking about 45 billion yuan ($6.7 billion) from the A-share private placement. An offering of that size would be the second biggest share sale globally this year, after rival battery maker LG Energy Solution Ltd. raised $10.7 billion in January in South Korea’s biggest ever initial public offering, according to data compiled by Bloomberg.

The final price represents a 12% discount to the company’s Wednesday closing price in Shenzhen and is around a 21% premium to the offering’s floor price of 339.67 yuan.

Shares in the battery maker fell about 1.2% as of 11:01 a.m. on Thursday in Shenzhen after rising as much as 1.8% earlier. The stock has dropped about 22% this year, giving it a market value of about $160 billion.

CATL’s 45 billion-yuan share placement, even after its stock price fell about 20% so far this year, suggests the battery maker is looking beyond near-term profit pain while focusing on a capacity push to meet surging demand and cement market leadership in the next couple of years.

Steve Man and Joanna Chen, BI auto analysts

Companies benefiting from the electric vehicle boom have tapped the markets to sell billions worth of share sales in recent months. BYD Co., which makes both EVs and batteries, raised $1.8 billion in a Hong Kong share offering 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, kicked off the share sale on Monday after flagging its intention to raise funds last year. In November, it said it was cutting the size to 45 billion yuan from 58.2 billion yuan. Proceeds will be used for the production and upgrade of lithium-ion battery manufacturing in four Chinese cities, as well as research and development.

A representative for CATL didn’t reply to requests for comment.

(By Pei Li, with assistance from Danny Lee and Charlotte Yang)

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