Contemporary Amperex Technology, the electric vehicle battery maker company, raised $6.7bn private placement of an A-share. Amperex marks the largest ever China’s capital market deal and the second-largest globally this year. Based on the people dealing with the transaction, the ChiNext-listed company has priced this large deal for Rmb410 per share. This price of deal comprises a 7.2% discount to the close of Rmb441.82. However, the 20.7/5 premium is for the floor price for as much as Rmb339.67.
Investors have seen it as a positive outlook in the battery sector especially it corrects in CATL’s share price. A Beijing-based fund manager on the bookbuilding affirms that the bookbuilding is the best game. They are very optimistic about the development of the lithium battery sector in the future. He added that some investors sell their current CATL holdings plus they subscribe the follow-on instead due to the discount. CATL shares on the other hand have raised for as much as Rmb692. However, it plunged around 49% recently.
On the other hand, the stock has finally rebounded by 26% and closed at around Rmb443.03 during the marketing of the company’s placement. Because the Chinese regulations need to set 80% of the last 20-trading-day average, the floor price was at Rmb339.67. Therefore the floor price completes the A-share private placements. However, the investors compete for the shares, especially the most popular one like CATL. Based on the term sheet, the bid should be at least Rmb1.2bn.
This kind of deal is actually almost out of reach for investors.
Commonly, investors ranks are based on the high or low on the bids and the subscribed amounts. In this scenario. when a deal gets the approved target, the remaining investors would automatically leave. A fund manager argues that it is apart from the securities and fund management companies pooling the funds from multiple accounts to meet requirements.