Chinese car and battery firm BYD has pulled plans to list its semiconductor unit in China because a proposed move to pump more cash into the business will impact the unit’s asset structure.
Scrapping the planned initial public offering (IPO) will not have a material adverse impact on the company’s existing operations or the future development strategies of the group, the automaker added.
BYD, backed by US billionaire Warren Buffett, said it would restart the unit’s listing process when the investment and production capacity expansion had been completed.
“BYD Semiconductor intends to seize the time window to make large-scale investment in wafer production capacity,” BYD said in a filing to the Shenzhen stock exchange, adding current wafer supplies were far from enough to meet demand amid rapid growth in electric vehicle manufacturing.
According to the IPO prospectus, the chip unit aimed to raise 2 billion yuan ($281 million) to fund projects and replenish capital on the Nasdaq-like ChiNext Board of the Shenzhen Stock Exchange.
The IPO plan was first halted by the exchange in August 2021, as a firm advising on the IPO process faced a regulatory probe.
- Reuters with additional editing by Sean O’Meara