Chinese electric vehicle maker BYD, backed by Warren Buffett, to raise up to $ 1.8 billion in Hong Kong stock sale

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BYD, the Chinese battery and electric car maker backed by Warren Buffett, is looking to raise up to US $ 1.8 billion in a follow-up Hong Kong IPO.

The Shenzhen-based electric vehicle maker aims to sell 50 million new shares with a price range of HK $ 273.5 (US $ 35.17) to HK $ 279.5 each, according to a conditions sheet seen by the South China Morning Post. That would be a discount of 5.8% to 7.8% from the HK $ 296.60 closing price of its H shares in Hong Kong on Friday.

The new shares are said to start trading on November 1 and represent around 1.8% of BYD’s market capitalization.

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BYD plans to use the proceeds to supplement working capital, pay down debt, invest in research and development, and general corporate purposes.

The stock sale comes a day after BYD announced that its net profit fell 27.5% to 1.27 billion yuan ($ 199 million) in the third quarter. BYD shares fell 1.7% on Friday after the results were announced the day before.

In August, a mainland brokerage backed by Citic Securities said industry leader BYD is expected to be valued at as much as 1.5 trillion yuan by 2022, or 169 times its projected profits. The company’s market capitalization was 821.9 billion yuan at Friday’s close, according to Bloomberg data.

BYD, which is controlled by its billionaire co-founder Wang Chuanfu, on Monday said it had received approval from the Hong Kong Stock Exchange for the plan to split its semiconductor unit in mainland China.

The company still needs to meet a number of conditions before the split can be implemented, including obtaining approval from the Shenzhen Stock Exchange and the China Securities Regulatory Commission (CSRC), according to a file. in stock exchange.

BYD Chairman and Co-Founder Wang Chuanfu speaks at Auto Shanghai 2019 in Shanghai. Photo: AP alt = BYD Chairman and Co-Founder Wang Chuanfu speaks at Auto Shanghai 2019 in Shanghai. Photo: AP

The automaker first announced in May its intention to list BYD Semiconductor, its 72.3% -owned chipmaking unit, on ChiNext, a Nasdaq-like technology board run by the Shenzhen Stock Exchange, in the goal to raise 2.69 billion yuan.

However, the split proposed in an initial public offering in Shenzhen was put on hold in August after the exchange launched an investigation into the law firm that advised the transaction. The exchange suspended more than a dozen other IPO applications involving the same law firm at the same time.

BYD relaunched its request for listing the semiconductor unit last month after filing additional documents with Chinese regulators.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice on China and Asia for over a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.

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