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