Chinese Lithium Giant Targets Up to $1.7 Billion in Hong Kong IPO
Tianqi Lithium is already listed in Shenzhen, where its stock has roughly doubled over the past 12 months
Tianqi Lithium Corp., 002466 -4.36%▼ one of the world’s largest producers of battery-grade lithium compounds, said Wednesday that it plans to raise the equivalent of up to $1.7 billion in a Hong Kong initial public offering, braving a subdued global market for stock issuance.
Investment banks handling the transaction will start taking orders from investors on Thursday and price the deal on July 6. The lithium producer expects to list on July 13.
The listing is poised to become the largest IPO in Hong Kong so far this year. Tianqi Lithium set a maximum price for its shares of 82 Hong Kong dollars, the equivalent of $10.45 apiece. At that price, Tianqi Lithium would pocket about $1.7 billion from the share sale.
Tianqi Lithium shares are already traded in mainland China, and the high end of the IPO price range is roughly 43% below the Wednesday closing price of its Shenzhen-listed stock.
Earlier this month, The Wall Street Journal reported that the Chengdu-based company aimed to raise more than $1 billion from the share offering, citing people familiar with the matter.
Jiang Weiping, Tianqi Lithium’s chairman, said that supply exceeded demand for most of the past two decades in the lithium industry. But that dynamic changed in 2021 with the growing popularity of electric vehicles, which depend on lithium-based chemicals for their rechargeable batteries. “We think this will be a far-reaching and long-term development,” Mr. Jiang said at a press conference on Wednesday.
The IPO proceeds would be first used to repay about $1.1 billion of bank loans, and then for other uses including funding the construction of a lithium-carbonate manufacturing plant in the Anju district of Suining, a city in China’s Sichuan province.
The company’s Shenzhen-listed shares declined 4.4% on Wednesday to close at 122.80 yuan, or the equivalent of about $18.31. They have roughly doubled in the past 12 months.