Chinese battery giant CATL's plan to raise at least $5 billion in Swiss global depository receipts (GDR) has been delayed as Beijing regulators raise concerns over the large scale of the offering, three people with direct knowledge of the matter said.
The company has told the China Securities Regulatory Commission , whose approval for the listing is required, that it plans to use the proceeds to fund its European expansion plans, especially the development of a plant in Hungary, one source said, and potentially also finance its expansion in the United States.with the listing as early as May.
The company said at the time proceeds raised in the placement will be used to fund the production and upgrades of lithium-ion batteries in four Chinese cities, and enhance research and development. At $5 billion, the GDR deal would easily be the largest such listing by a Chinese company in Switzerland, according to Refinitiv data.of cross-listing platform to allow companies to raise capital by issuing and listing GDRs on the Swiss exchange SIX. Swiss companies can issue Chinese Depository Receipts on the Chinese exchanges.
Offshore investors are attracted to Chinese issuers' GDRs as they can generally buy the shares with a 10% discount and freely convert them into corresponding Chinese shares after 120 days of trading on European boards. With much better liquidity on the domestic market, investors can exit more easily.
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