HONG KONG—One of China’s high lithium producers started advertising what is anticipated to be Hong Kong’s largest preliminary public providing to this point this yr, braving latest market volatility to check international investor urge for food for shares of new-energy firms.
Tianqi Lithium Corp.
002466 -1.01%
is aiming to boost greater than $1 billion in an inventory on Hong Kong’s inventory change, in accordance with folks conversant in the matter. The Chengdu, China-based firm, which says it is likely one of the world’s largest producers of battery-grade lithium compounds, has been listed in Shenzhen since 2010. Its mainland shares have doubled in worth over the previous 12 months, giving it a market capitalization of round $26 billion, in accordance with FactSet.
The firm filed a revised prospectus on June 19 after passing an inventory listening to in Hong Kong and earlier receiving approval from China’s securities regulator to promote shares within the Asian monetary hub. It is anticipated to cost its IPO on July 6 and begin buying and selling July 13, the folks conversant in the deal stated. The closing deal measurement may change relying on investor demand.
Tianqi Lithium is making an attempt to drag off a big fundraising at a time when international demand for IPOs has been depressed. Surging U.S. inflation, quickly rising rates of interest, Russia’s invasion of Ukraine and uncertainty in regards to the international financial outlook have helped gas a world inventory selloff, which has pushed new stock-issuance volumes decrease.
Hong Kong’s market has been hit significantly laborious; within the year-to-date interval, firms have raised a complete of $2.4 billion in new and secondary inventory listings within the metropolis, down greater than 90% in worth from the identical interval a yr earlier, in accordance with Dealogic information.
Tianqi Lithium, which has been in enterprise for round 30 years, makes lithium compounds and derivatives in China and owns and mines lithium minerals in Australia, in accordance with its prospectus. The metallic is utilized in rechargeable batteries and has been in demand for electric-vehicle manufacturing. It can be used to make glass, ceramics and different sorts of spinoff merchandise.
The firm beforehand utilized to checklist in Hong Kong in 2018 and had aimed to boost an analogous quantity on the time to assist pay for a minority stake that it purchased that yr in a Chile-based lithium manufacturing and distribution firm often called SQM. The IPO ended up being shelved, though it acquired a inexperienced gentle from the China Securities Regulatory Commission.
The proceeds from the approaching share sale in Hong Kong could be used to repay debt that Tianqi Lithium nonetheless has from that $4 billion Chilean mining deal, in addition to to fund the development of a lithium carbonate manufacturing plant within the Anju district of China’s Sichuan province.
The Shenzhen-listed shares of Tianqi Lithium and certainly one of its principal rivals,
Ganfeng Lithium Co.
, have considerably outperformed the broader Chinese inventory market during the last two years, thanks partially to surging demand for the compounds they produce.
Tianqi Lithium’s income greater than doubled to the equal of $1.13 billion in 2021 and the corporate reported a revenue of $626 million, swinging from a year-earlier lack of $167 million.
—Cao Li contributed to this text.
Write to Dave Sebastian at [email protected]
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