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UPDATE 1-China battery giant CATL plans $2 bln IPO to fund expansion
November 14, 2017 / 8:25 AM / 8 days ago

UPDATE 1-China battery giant CATL plans $2 bln IPO to fund expansion

* Says aims to complete IPO by end-June 2018

* China electric car market growing fast

* Biggest IPO by non-financial private firm on mainland

* IPO would value the firm at around $20 billion (Adds expected timeline for IPO completion, other details)

By Adam Jourdan

SHANGHAI, Nov 14 (Reuters) - Chinese battery giant Contemporary Amperex Technology Co Ltd (CATL) is planning a $2 billion IPO in Shenzhen, aiming to boost its financial muscle amid a global battle for a share of the country’s fast-growing electric car market.

The Ningde-based firm, founded in 2011, has grown rapidly on the back of strong government support and a push by Beijing to shift the world’s largest auto market towards greener electric and hybrid plug-in vehicles.

CATL said in a prospectus that it planned to raise 13.1 billion yuan ($1.97 billion) through an initial public offering of 217 million new shares, or about 10 percent of its enlarged capital, indicating a valuation of around $20 billion.

The firm was aiming for the IPO to be completed by the end of June next year, though it added the time frame would depend on approvals from the China’s securities regulator.

The IPO could be China’s largest share sale by a private non-financial firm.

CATL plans to use the funds from the IPO to build two new battery plants, including a giant 24 gigawatt hour (GWh) facility, that would help to massively boost its output.

The company competes with Japan’s Panasonic Corp, South Korea’s LG Chem Ltd, local rival BYD and Tesla Motor Inc.

CATL held 10.5 percent of the global electric-vehicle (EV) battery market in 2016, behind only BYD and Panasonic, according to BNP Paribas.

The firm’s move to list on China’s NASDAQ-style ChiNext board would also give investors a potential way into a company pegged as one of the battery champions in the world’s largest market for electric cars.

Under President Xi Jinping, China is driving a seismic shift towards so-called new-energy vehicles, and wants to build a dominant domestic industry of both NEV carmakers and battery manufacturers to help drive that push.

Beijing has set strict quotas for electric and hybrid cars that come into effect from 2019. It has an ambitious target of 2 million NEV sales by 2020 and has signalled longer-term it will phase out the sale of conventional petrol engine cars.

In the prospectus, first posted by China’s securities regulator late on Friday, CATL said it had brought in 14.9 billion yuan in sales last year, up almost threefold versus 2015. Net profits were up sharply also to 3.1 billion yuan.

The IPO funds will help CATL boost its lithium-ion car battery output, helping it hit an earlier target of 50 GWh capacity by 2020, as the firm looks at potentially taking market share in overseas markets as well as in China.

Last week, a CATL executive said the firm was looking into upstream investments in raw materials to ensure stable supply, as prices of some metals, mostly cobalt, soar. ($1 = 6.6391 Chinese yuan renminbi) (Reporting by Adam Jourdan; Editing by Stephen Coates and Himani Sarkar)

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