Chinese lithium producer Ganfeng has secured six cornerstone investors for its Hong Kong initial public offering, including Korean battery makers LG Chem and Samsung SDI.
The listing is expected to raise as much as $676m for the Jiangxi-based company and price at between HK$16.50 to HK$26.50 a share, according to the terms of the deal.
The cornerstone investors have signed up for an aggregate of $229.8m of shares — based on the midpoint of the price range.
Ganfeng is one of China’s largest suppliers of lithium, a metal that is a key ingredient for batteries in smartphones and electric cars. Last week the company revealed it had signed a three-year agreement to supply lithium to Tesla, which sent its shares in Shenzhen up by 10 per cent.
The backing of some of the world’s largest battery companies, LG Chem and Samsung SDI, highlights the growing demand for lithium from the sector, which is rapidly expanding production due to rising sales of electric cars.
Lithium demand is set to grow at a compound annual rate of 18 per cent through to 2025 due to demand for electric vehicles, according to analysts at Baird.
The fundraising follows a string of lacklustre IPOs in Hong Kong this year, in which shares have priced at the lower end of their marketed ranges.
Pricing is expected on October 3, and listing on Oct. 11. Citi is the lead bank on the IPO.
The China Structure Reform Fund has agreed to invest $70m, LG Chem $50m, Samsung SDI $50m, Dong Feng Asset Management $30m, FAW Group around $21.3m, FAW Group around $21.3m, and private equity company GSR Capital around $8.5m.
Source: FT.com
