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Battery Giant CATL in $1.4 Billion Fund-Raising Plan

By Dave Yin / Sep 19, 2019 05:41 PM / Business & Tech

Photo: VCG

Photo: VCG

Top Chinese lithium-ion battery maker CATL has been on a tear this past year, announcing new investments worth hundreds of millions of dollars. Now we’re finally getting word on how it might pay for some of those.

Contemporary Amperex Technology Co. Ltd. (CATL) has just announced that China’s stock regulator has approved its plan to issue up to 10 billion yuan ($1.4 billion) worth of corporate bonds, according to a Thursday filing to the Shenzhen stock exchange. The company plans to issue the notes in multiple installments, the first within the next 12 months and the rest within 24 months, it said.

Though CATL did not say what the funds will be used for, chances are much of the money could go to its recent flurry of new projects to promote its lithium battery business both at home and abroad. The company is paying AU$55 million ($37.33 million) for 8.5% of Western Australian lithium exporter Pilbara. But its biggest investment is a $2 billion battery factory it’s building in Germany to supply BMW and other customers.

CATL’s profits surged 130.8% in the first half of the year thanks to booming electric car sales in the world’s largest auto market. However, both the battery maker and rival BYD warned that sales could weaken as Beijing phases out subsidies for new-energy vehicles (NEVs), which had fueled breakneck growth in the industry.

Chinese sales of NEVs contracted in July for the first time since the start of 2017. Sales dropped for a second straight month in August, declining 16% from a year earlier to 85,000 units.

Contact reporter Dave Yin (davidyin@caixin.com, Twitter: @yindavid)

Related: China’s Battery Leader CATL in Supply Partnership With Bosch

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