Top Lithium Producer Ganfeng to Raise US$676 Million in Hong Kong IPO

- September 27th, 2018

According to the terms of the deal, the Jiangxi-based company will be offering 200.2 million shares priced at between HK$16.50 to HK$26.50.

Top lithium producer Ganfeng Lithium (SHE:002460) is looking to raise up to US$676 million in its Hong Kong initial public offering. The company said it has secured six cornerstone investors, which include top battery makers.

According to the terms of the deal, the Jiangxi-based company will be offering 200.2 million shares priced at between HK$16.50 to HK$26.50.

Six cornerstone investors have committed to buy approximately US$230 million in stock, including Korean battery makers LG Chem (KRX:051910) and Samsung SDI (KRX:006400), which have agreed to buy US$50 million of shares each.

Lithium in 2018

Your free report includes:

  • Expert commentary
  • Stocks to buy
  • Market forecasts
Give me my free report!

Other cornerstone investors include the China Structure Reform Fund, which has agreed to US$70 million of shares, Dong Feng asset management, which will invest US$30 million, FAW Group, committed to US$21 million and GSR Capital, which will buy about US$8.5 million.

The Shenzhen-listed company will use part of the money for acquisitions, further exploration and to expand capacity to meet rapidly growing demand from the electric vehicle sector. Lithium is a key element in electric car batteries.

Additionally, some of the funds from the offering will be used to further develop Ganfeng’s partnership with Lithium Americas (NYSE:LAC), which is developing the Cauchari-Olaroz project in Argentina.

According to CRU Group, Ganfeng is the world’s third-largest lithium compounds producer and the world’s largest lithium metals producer in terms of production capacity.

The company has interests in six lithium resources in Australia, Argentina, China and Ireland, but its primary source of lithium raw materials is Mount Marion in Western Australia.

The Hong Kong IPO news comes a few days after the Chinese producer signed a deal to supply lithium hydroxide products for Tesla’s (NASDAQ:TSLA) batteries. The agreement is set to start in 2018 and run until 2020, but it could be extended by three years.

Earlier in September, Ganfeng agreed a deal with battery maker maker LG Chem (KRX:051910) to almost double its supply of battery materials from 2019 to 2025.

Ganfeng has now locked in the sector’s two biggest supply pacts, Simon Moores, managing director of Benchmark Mineral Intelligence, told Bloomberg at the time. “These deals are dwarfing the size of the entire lithium hydroxide market from only a couple of years ago,” Moores said.

The IPO’s pricing is expected on October 3, and listing on October 11. Citi is the lead bank on the offering.

On Wednesday, shares of Ganfeng Lithium were trading at CNY 32.85. The company’s share price is down 33.36 percent year-to-date.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Battery Metals in 2018


Click to download your free report


Get the latest Lithium Investing stock information

Get the latest information about companies associated with Lithium Investing Delivered directly to your inbox.

Lithium Investing

Select All
Select None

By selecting company or companies above, you are giving consent to receive email from those companies. And remember you can unsubscribe at any time

3 responses to “Top Lithium Producer Ganfeng to Raise US$676 Million in Hong Kong IPO

  1. it seems like all the lithium producers share prices down for over a year, will they ever go back up with so many in the same field,

Leave a Reply

Your email address will not be published. Required fields are marked *