CATL announced in 2022 that it would build its second European battery factory in Hungary.Continue reading
The electric battery factory construction in Debrecen by CATL is much cited in the media these days. The Chinese company is spending so much on it that even this year’s largest share issue in the world will only partially cover the costs, reports Világgazdaság.
Chinese battery manufacturer CATL (Contemporary Amperex Technology), which is preparing to build its second factory in Debrecen, expects to raise well over $4 billion from its Hong Kong stock market debut on Tuesday, which is considered the world’s largest IPO this year, according to Japanese stock market news portal Nikkei Asia. Reportedly, 90 percent of the proceeds from the IPO will be used to build the factory in Debrecen, eastern Hungary.
On Tuesday morning, the new share price set off at 296 Hong Kong dollars, and closed at 306.20 Hong Kong dollars.
According to Reuters, a total of 125.4 million shares were distributed among institutional investors, with 10.16 million shares going to small investors. The South China Morning Post reported that this price represents a 6.5 percent discount compared to the Shenzhen listing, compared to an average Hong Kong discount of 25 percent for Chinese companies listed in Hong Kong and other Chinese stock exchanges.
Furthermore, the huge amount was raised without U.S. investors being able to participate in the listing, as the share issue was conducted exclusively in “Reg S” form, excluding Americans while also exempting the issuer from certain U.S. regulatory obligations. The heavily oversubscribed transaction, even without U.S. investors, shows that
China’s technology champions have easy access to the necessary international financing and that investors are unable to resist the lure of leading Chinese companies despite U.S. calls to do so.
CATL’s February IPO filing also revealed that most of the proceeds will be used to build the battery cell factory in Debrecen, which is expected to have an annual production capacity of 100 gigawatt hours. The total investment cost of the site is expected to reach €7.3 billion. The battery factory will be located near BMW’s new plant in Debrecen, where vehicles based on the “Neue Klasse” platform are manufactured, and will be the Chinese company’s second European battery factory after its facility in Erfurt.
CATL remains by far the most dominant global supplier of batteries for electric vehicles.
According to data from South Korean market research firm SNE Research, CATL have a 38 percent global share of the electric vehicle battery market by 2024. In China, the company’s market share is reported to be close to 50 percent.
Via Világgazdaság, Reuters, Nikkei Asia, South China Morning Post; Featured photo via X/CATL
