Tianqi Lithium Corp. 002466 -1.01 percent is trying to raise more than $1 billion in a listing on Hong Kong’s stock exchange, according to a person familiar with the issue. As of 2010, the Chinese firm located in Chengdu, which claims to be one of the world’s major manufacturers of lithium compounds, has been listed in Shenzhen. FactSet estimates that the company’s market value has tripled in the last year, putting it at a value of nearly $26 billion.
The business submitted a revised prospectus on June 19 after clearing a listing hearing in Hong Kong and previously gaining clearance from China’s securities regulator to sell shares in the Asian financial center. It is set to price its IPO on July 6 and start trading on July 13, the person familiar with the arrangement said. The ultimate offer size might alter based on investor demand.
Tianqi Lithium is aiming to pull off significant financing at a time when worldwide demand for IPOs has been weak. Surging U.S. inflation, swiftly increasing interest rates, Russia’s invasion of Ukraine, and anxiety about the global economic future have helped fuel a worldwide market selloff, which has pushed new stock-issuance volumes down.
Firms in Hong Kong have raised a total of $2.4 billion in new and secondary stock listings so far this year, a decrease of more than 90% from the same period last year, according to data from Dealogic.
In its prospectus, Tianqi Lithium states that it manufactures lithium compounds and derivatives in China, as well as owns and mines lithium deposits in Australia and that it has been in business for around thirty years. The metal is utilized in rechargeable batteries and has been in demand for electric-vehicle manufacture. It is also used to manufacture glass, pottery, and other forms of derivative goods.
The business had tried to list in Hong Kong in 2018 and had hoped to raise a similar sum at the time to help pay for a minority share that it purchased that year in a Chile-based lithium production and distribution company known as SQM. The IPO ended up being shelved, even though it obtained a green light from the China Securities Regulatory Commission.
The revenues from the planned share sale in Hong Kong would be used to settle the debt that Tianqi Lithium still owes from the $4 billion Chilean mining acquisition, as well as to support the development of a lithium carbonate production factory in the Anju district of China’s Sichuan province.
The Shenzhen-listed shares of Tianqi Lithium and one of its key competitors, Ganfeng Lithium Co., have dramatically outperformed the larger Chinese stock market over the previous two years, due in part to increasing demand for the compounds they create.
Tianqi Lithium’s revenues more than tripled to $1.13 billion in 2021 and the company claimed a profit of $626 million, reversing a loss of $167 million from the previous year.