(Yicai Global) Sept. 28 -- Major Chinese lithium producer Jiangxi Ganfeng Lithium Industry [SHE:002460] has issued a prospectus for an H-share offering in the Hong Kong stock market, and has confirmed that the new shares will come out on Oct. 11, with additional issues possible. The flotation is expected to raise up to HKD5.6 billion (USD726 million).
The price range of the H-share issue is provisionally set at HKD16.50 (USD2.10) to HKD26.50. It is expected to be fixed around Oct. 4 and the final issue price will be released Oct. 10, the company stated yesterday.
Of the 200,185,800 H-shares to be sold worldwide, 20,018,800 will be initially offered in Hong Kong, making up about 10 percent of the global total, while180,167,000 will go on sale internationally, accounting for around 90 percent, the announcement said.
The joint global coordinator representing International Underwriters may also exercise the right of over-allotment within 30 days after the Hong Kong public offering deadline of October 3, requiring the company to issue no more than 12,891,600 additional H shares. The announcement added.
Ganfeng Lithium may raise up to HKD5.6 billion from the Hong Kong shares at the maximum price of HKD26.5, calculated per the number of shares in the scheduled issue, plus the possible maximum allotment limit.
The rapid growth of the new energy auto industry has brought great opportunities for Ganfeng lithium industry, which has seized control of upstream lithium resources.
The company and its wholly-owned unit GFL International recently won long-term orders from international battery maker LG Chemistry and electric vehicle giant Tesla for battery-grade lithium compounds. It will supply LG Chemistry with 92,600 tons of battery-grade lithium hydroxide and lithium carbonate over the next six years. By the end of 2020, 20 percent of the company's output of battery-grade lithium hydroxide will go to Tesla's battery suppliers.
The firm will invest up to CNY500 million yuan to build a battery-grade lithium hydroxide production line with an annual capacity of 25,000 tons in eastern China's Jiangxi province where it is based to meet growing market demand, it also announced Sept. 26.
Editor: Ben Armour