China Battery Maker CATL Raises $6.7bn in Private Placement

 

China’s Contemporary Amperex Technology Co (CATL), the world’s largest battery maker, raised $6.7 billion in a private placement, marking the second-largest equity capital markets transaction in the world so far in 2022.

CATL, which supplies batteries to carmakers, including Tesla, Volkswagen, BMW and Nio, carried out the private placement during a book build on Wednesday, according to sources who said the company priced its shares at 410 yuan ($61.07) each.

CATL shares rose 1.7% on Thursday to 457.88 yuan. The Shenzhen-listed stock closed on Wednesday at 465.66 yuan, up 5.4%.

The cash will be used to fund expansion of its domestic battery manufacturing plants and enhancing its research and development, according a term sheet for the deal seen by Reuters.

Jefferies analysts said CATL had been losing market share in recent quarters.

“Second-tier players are expected to see faster earnings-per-share growth in 2023, including Eve Energy (77%), Gotion (47%) and Sunwoda (159%), while CATL‘s growth slowed to 42%,” Johnson Wan and his colleagues in Hong Kong wrote in a note.

The fundraising comes amid increasing volatility in global financial markets roiled partly by concerns about China’s economic growth after its persistent lockdowns in line with its zero-Covid strategy.

Rising inflation and the prospect of higher interest rates, especially in the US, has prompted a major sell-off in risk assets such as equities.

 

  • Reuters, with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.