July 29, 2020 / 9:21 PM / 16 days ago

China's Li Auto set to raise $1.1 billion in U.S. IPO: sources

NEW YORK (Reuters) - Chinese electric vehicle maker Li Auto Inc LI.O is set to raise $1.1 billion in its initial public offering (IPO) in New York after selling shares to investors for more than it expected, people familiar with the matter said on Wednesday.

Li Auto priced 95 million shares at $11.5 per share, the sources said. The company initially aimed to sell these shares at between $8 and $10 per share.

The sources requested anonymity ahead of an official announcement. Li Auto did not immediately respond to a request for comment.

Li Auto’s IPO in New York comes as U.S.-listed Chinese companies are facing tightened scrutiny and more strict audit requirements from U.S. regulators, while geopolitical tensions escalate between the world’s two largest economies.

Sentiment towards Chinese firms among U.S. investors has also been hit by the fallout from Luckin Coffee Inc (LC0Ay.MU), a Chinese coffee chain, which was listed on Nasdaq and earlier this year disclosed that some of its employees fabricated sales accounts.

The IPO values Li Auto at around $10 billion. Private equity firm Hillhouse Capital agreed to invest $300 million in the company as part of the IPO, the company said in a regulatory filing.

The five-year-old automaker, formerly known as CHJ Automotive, is following its Chinese peer NIO Inc (NIO.N), which went public in New York in 2018. NIO’s share price has more than tripled so far this year.

Li said in its IPO prospectus it would use most of the proceeds raised for capital expenditures, and research and development of new products. It is building Li ONE extended-range electric sport-utility vehicles in China.

The company’s shares are due to start trading on Nasdaq under the symbol “Li” on Thursday.

Goldman Sachs, Morgan Stanley, UBS and CICC were among the underwriters for the IPO.

Reporting by Echo Wang in New York; Editing by Diane Craft and Aurora Ellis

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