Chinese Lithium Giant Tests Investor Demand for Hong Kong IPO

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Share sale by Tianqi Lithium could raise more than $1 billion

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The company filed a revised prospectus on June 19, after passing a listing hearing in Hong Kong and gaining approval from China’s securities regulator to sell shares in the first Asian financial hub. It is expected to price its IPO on July 6 and begin trading on July 13, said a person familiar with the deal. The final deal size may change based on investor demand.

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Tianqi Lithium is seeking massive fundraising at a time when global demand for an IPO has subsided. Rising US inflation, rapidly rising interest rates, Russia’s invasion of Ukraine and uncertainty about the global economic outlook have helped fuel a global stock sell-off, which has dented new stock-issue volumes.

The Hong Kong market has been particularly badly hit; In the year-over-year period, the companies raised a total of $2.4 billion in new and secondary stock listings in the city, according to Dealogic data, up more than 90% in value from the same period a year ago.

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Tianqi Lithium, which has been in business for nearly 30 years, manufactures lithium compounds and derivatives in China and owns and mines lithium minerals in Australia, according to its prospectus. The metal is used in rechargeable batteries and has been in demand for electric-vehicle production. It is also used to make glass, ceramics and other types of derivative products.

The company previously applied for listing in Hong Kong in 2018 and was aiming to raise a similar amount that year as a minority stake in a Chile-based lithium production and distribution company known as SQM. helps to pay for The IPO ended, even though it got the green light from the China Securities Regulatory Commission.

Proceeds from the upcoming share sale in Hong Kong will be used to pay off debt that Tianqi Lithium still has from that $4 billion Chilean mining deal, as well as lithium in the Anju district of China’s Sichuan province. Funds will be given for the construction of carbonate manufacturing plant. ,

Shenzhen-listed shares of Tianqi Lithium and one of its main rivals, Ganfeng Lithium Co.

The broader Chinese stock has outperformed the market over the past two years, thanks in part to increased demand for the compounds they produce.

Tianqi Lithium’s revenue more than doubled to $1.13 billion in 2021 and the company reported a profit of $626 million, swinging from a loss of $167 million a year earlier.

[email protected] . on Dave Sebastian

Credit: www.Businesshala.com /

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