China’s leading battery manufacturer CATL [300750:CH] announced a private placement plan on August 12, aiming to raise up to RMB58.2bn to expand its battery production capacity, as reported by Caixin on August 13. CATL planned to issue at most 233m shares, equivalent to 10% of the company’s share capital prior to the share placement. The plan would fund six of the company’s lithium-ion battery and renewable energy technology centers across the country, potentially raising its battery production capacity to over 400 gigawatt-hours (GWh) in total. The plan is currently pending final approval from the CSRC, the Shenzhen Stock Exchange (SZSE), and the company’s shareholders.
This is not the first time CATL looked for a private share placement since its IPO in June 2018. In February 2020, the company released a non-public offering plan of 120m shares with a reserve price of RMB129.67 per share. In the following months, 38 institutional investors submitted quotations with nine eventually subscribed at RMB161 per share in August, 24% higher than the reserve price. CATL raised RMB19.6bn from this private placement. By this August, it has used RMB13.1bn on upscaling its battery manufacturing capacity.
CATL’s need for additional capital reflected its rapid expansion under the growing demand for electric vehicles (EV) and battery storage solutions. As the world’s largest lithium-ion battery producer at present, the company was behind half of the world’s lithium-ion battery supply, especially to EV makers including Tesla [TSLA:US], Volkswagen [VOW:GR], and Geely [0175:HK]. Its EV battery delivery grew 320.8% YoY to 15.1GWh in the first quarter of this year and further reached 25.76GWh by the end of June, ranking first in the Chinese market. Growing sales also drove up the company’s share price. On August 12, its shares closed at RMB502 per share, up 156% YoY, with a market capitalization exceeding RMB1.1bn (USD169.8m).