World’s largest EV battery maker CATL to raise at least $4bn
Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Chinese electric-vehicle battery maker CATL said it would raise at least $4bn in what is set to be Hong Kong’s biggest share sale this year.
The company’s shares will be priced this week and start trading on May 20, according to a prospectus filed with the Hong Kong stock exchange on Monday.
Chinese oil company Sinopec, sovereign fund Kuwait Investment Authority and Asian investment firm Hillhouse Capital are leading a group of more than 20 cornerstone investors.
Local Chinese government funds, including Luoyang Sci-tech Investment, and insurance firm Taikang Life, are also among the cornerstone investors.
CATL, which already has shares listed on China’s Shenzhen stock exchange, is the world’s biggest producer of batteries for EVs and energy storage systems.
The secondary listing could raise more than $5bn if demand is strong and a greenshoe option — which allows underwriters to sell more shares than planned — is exercised.
The pricing of its Hong Kong shares is 1.4 per cent below its mainland price, as of market close on Friday. The relatively small discount reflects stronger investor demand, according to a person close to the deal. Shenzhen-traded shares of CATL jumped almost 3 per cent to Rmb255 ($35.30) at the Monday opening.
CATL has grown rapidly on the back of China’s EV boom and has embarked on an ambitious global expansion plan, including building battery factories in Europe and licensing technology to US carmakers.
Based in Ningde, south-eastern China, the company has also drawn scrutiny from Washington over national security fears and there is uncertainty over its long-term position in the US market amid trade tensions between Beijing and Washington.
Monday’s filing came as the US said it had made “substantial progress” over two days of trade talks with Chinese officials in Geneva, a sign the world’s two biggest economies might de-escalate their trade war.
However, CATL said in its filing that US tariff policies are “rapidly evolving” and it “cannot predict how tariff policies in various countries may further evolve”, or potentially impact its business.
The filing also showed that US investment banks, including JPMorgan and Bank of America, are the main underwriters of the listing, despite a US congressional committee on April 17 calling for US banks to drop out of the deal.
According to one banker close to the deal, some US investors are still weighing their involvement in the share sale amid concerns over the Pentagon’s addition of CATL to its list of companies with affiliations to the Chinese military.
While such designations have little legal impact, it risks reputational damage and further scrutiny from US agencies.
CATL reiterated its denial in Monday’s filing of these allegations. It said that it has “never engaged in any military-related businesses or activities” and said it is “engaging” with the US Department of Defense to “address the false designation”.
The company also noted that the designation only restricts it from working with a small number of US agencies and is not expected to have a broader impact on its business.
