Chinese Battery Giant CATL Aims to Raise $5 Billion via Share Placement
The company is angling to capture growing demand for power batteries and energy-storage batteries
- CATL plans to raise nearly $5 billion through a share placement to fund its expansion into renewables and clean energy.
- The battery maker will allocate about 90% of the proceeds to its gigafactory under construction in Debrecen, Hungary.
- CATL signed a three-year deal with Beijing HyperStrong Technology for 60 GWh of sodium-ion batteries, its first such strategic partnership.
Chinese battery giant CATL is looking to raise $5 billion in a share placement to help fund its push into renewables as demand for electrification rises.
Contemporary Amperex Technology, as the company is formally known, plans to place 62,385,000 new H-shares at 628.20 Hong Kong dollars each—a discount of roughly 7% from the stock’s closing price on Monday.
The battery maker, which counts Tesla and Volkswagen among its clients, estimates that it will raise net proceeds of HK$39.11 billion, equivalent to US$4.99 billion, it said Tuesday.
CATL’s shares fell 8.0% to HK$622.00 in early trade in Hong Kong while its Shenzhen-listed shares dropped 1.5%.
CATL said it was the right time for a placement to help it seize the opportunities arising from the global transition toward clean energy, and cement its position in the industry.
The new energy sector has been growing rapidly, particularly given the uncertainty over oil prices because of the conflict in the Middle East, and CATL wants to capture growing demand for power batteries and energy-storage batteries.
“This calls for accelerating the implementation of our global zero-carbon strategy, expanding our overseas business presence, stepping up investment in cutting-edge R&D and innovation, and building long-term sustainable growth drivers,” it said.
The company will use around 90% of the proceeds for its gigafactory under construction in Debrecen, Hungary, it said. The factory has a planned annual capacity of 100 gigawatt-hours, the company’s second battery plant in Europe after its German plant.
Late Monday, the company also said that it has signed a three-year deal with Beijing HyperStrong Technology for 60 GWh of CATL’s sodium-ion batteries, marking CATL’s first strategic partnership in the area.
While no financial details were disclosed, the move’s significance lies in it being CATL’s first strategic partnership in the sodium-ion space, seen as one of the most promising successors to the traditional lithium-iron-phosphate battery.
CATL and electric-vehicle and battery giant BYD command over half of the global market for lithium-iron-phosphate batteries, but they are also investing heavily in technologies that could eventually replace it, Gavekal Research analysts said in a note.
Sodium-ion technology is notable because it could free batteries from the vagaries of the lithium price cycle, the analysts said.
Given that China accounts for 95% of world sodium-ion production and CATL controls 90% of the relevant patents, if lithium iron phosphate batteries do give way to another technology, odds are that the leading producers will still be Chinese.